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University  of  North  Carolina  at  Chapel  Hill 


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ADDUESSK9  rj»TO     THE 

President  of  the  Confederate  States. 


BY    DTJFF7GRE 


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augusta;  ga.;  / 

J..T.    BATERSON     &     CO.,   LITHOGRAPHERS    AND    PRINTERS, 

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Library,  Univ.  of 
North  Caroline 


FINANCE 


ADDRESSED     TO     THE 


PRESIDENT  OF  THE  CONFEDERATE  STATES. 


— ««Mt^jfe    i  i    i    ^mi 


BY    BUFF    GREEN 


Anxious  to  promote  the  public  interests  as  far  as  in  my  humble  sphere 
I  can  do,  I  venture  to  suggest  a  plan  -for  the  restoration  of  the  value 
-of  the  public  credit,  which,  I  hope,  if  aided  by  your  approval,  will  b« 
adopted  by  Congress,  and  is  therefore  respectfully  submitted  for  your  con- 
sideration. . 

1.  That  all  payments  from  the  Treasury  of  the  Confederate  States  be 
made  in  gold  or  else  in  coupon  bonds,  bearing  a  rate  of  interest  which  will' 
be  an  equivalent  for  the  use  of  money,  or  else  in  Treasury  certificates 
bearing  no  interest,  of  denominations  suitable  for  currency,  not  exceeding 
five  hundred  dollars,  and  convertible  into  bonds  at  the  will  of  the  holders. 

2.  That  the  bonds  be  of  denominations  not  less,  than  one  thousand 
dollars,  and  convertible  into  certificates,  deducting  five  per  cent. 

8.  That  all  payments  into  the  Treasury  shall  be  made  in  gold  or  silver, 
«r  in  Treasury  Certificates. 

4.  That  the  Treasury  Certificates  shall  bear  date  on  the  1st  of  January, 
April,  July  and  October,  and,  if  not  funded  or  paid  on  account  of  public 
dues,  within  six  months  from  their  date,  shall  be  taxed  five  per  cent.,  to 
be  deducted  when  funded  or  paid;  and  if  not  funded  or  paid,  as  aforesaid, 
within  twelve  months  from  their  date,  then  to  be  subject  to  a  tax  of  ten 
per  cent.,  and  to  an  additional  tax  of  five  per  cent,  for  each  additional 
three  months,  during  which  they  may  not  have  been  funded  or  paid  as 
aforesaid 

5.  The  whole  of  the  public  debt,  as  far  as  practicable,  to  be  placed  on 
the  same  basis,  and  all  be  made  redeemable  at  the  pleasure  of  the  Gov- 
ernment. 


\l 


2  "  . 

('--/  j        yff, 

6.  That  the  certificates  be  made  a  legal  tender,  and  neither  the  certifi- 
cates nor  the  bonds  be  taxed,  except  as  above  provided  for,  unless  it  be- 
comes necessary  to  increase  the  tax  on  the  certificates,  as  a  means  of  main- 
taining tljeir  relative  value  as  money. 

If,  at  a  cost  not  exceeding  the  cost  of  Treasury  Notes,  I  could,  on  the 
,  1st  of  January,  April,  July  and  October,  of  each  year,  deposit  in  the  Treas- 
ury of  the^Confeclerate.  Government  and  of  each  of  the  separate  States,  a 
sum,  in  gold,  equal  to  the  disbursements  of  each,  for  the  next  succeeding 
three  months,  no  one  would  dispute  my  claim  as  a  public  benefactor.  I 
propose  to  demonstrate  : 

1.  That  Congress  have  power  to  make  the  certificates  thus  to  be. issued 
a  tender. 

2.  That  the  certificates,  if  made  a  tender,  will  be  money. 

3.  That  this  paper  money  will  be  more  valuable  than  gold  as  a  circulat- 
ing medium. 

«  4.  That  this  money  will  be  more  stable  and  uniform  in  value  than  gold. 
•  5.  That  Congress  can  regulate  the  value  of  such  a  currency  and  cannot 
regulate  the  value  of  gold. 

6.  That  the  measures  proposed  would  not  only  diminish  the  burden  of 
the  public  debt,  but  would  convert  it  into  capital,  which  would  be  much 
more  available  and  beneficial  in  the  progress  and  development  of  our  in- 
dustry, our  agriculture,  our  manufactures,  and  our  commerce,  foreign  and 
domestic,  than  if  the  whole  disbursements  of  our  Government,  State  as 
well  as  Confederate,  were  paid  in  gold. 

7.  ■  That  under  such  a  system  of  paper  mOney,  the  States  can  organize  a 
system  of  banking,  requiring  each  bank  to  place  ample  funds  with  #the 
Treasurer  of  the  State  for  the  redemption  of  their  notes,  to  be  held  in 
trust,  and  applicable  solely  to  that  object. 

8.  That  this  would  protect  the  public  against  loss  by  bank  failures;  and, 
at  the  same  time,  enable  the  banks  to  increase  their  line  of  discounts  and 
to  greatly  increase  their  profits. 

9.  That^  whilst  it  would  greatly  increase  the  public  and  individual  re- 
sources, it  would  greatly  diminish  the  burden  of  taxation. 

10.  That  such  a  reform  in  our  system  of  finance  would  ensure  the  pay- 
ment of  the  interest  and  principal  of  the  public  debt,  in  a  medium  of  much 
greater  value  than  that  in  which  it  was  created. 

11.  That  the  conversion  of  our  present  system  of  currency  into  a 
metallic,  or  into  a  paper,  convertible  into  a  metallic  currency,  would  inev- 
itably cause  so  great  a  depreciation  of  the  values  of  labor  and  of  property, 

.    ae  to  render  the  payment  of  the  public  debt  impossible,  and  to  make  revo- 


lution  and  repudiation  inevitable,  after  having  reduced  the  whole  country 
to  a  state  of  distress,  'bankruptcy  and  despair,  in  which  we  would  be  unable 
to  make  payment: 

"12.  The  measures  which  I  propose' will  surely  bring  financial  indepen- 
dence and  prosperity,  whilst  the  present-system,  if  adhered  to,  will  endan- 
ger our  political  independence,  and  surely  overwhelm  us  with  national  and 
individual  bankruptcy,  and  with  unexampled  disgrace,  distress  and  ruin. 

I  am  aware  that  many  believe  that  ours  is  a  hard  money  Government, 
and  that  nothing  but  gold  or  silver  can  be  made  a  tender:  I  am  also 
aware  that  many  believe  that  it  is  impossible  to  prevent  the  depreciation 
of  paper  money.  I  am  further  aware  that  these  opinions  are  so  deeply 
impressed  upon  the  public  mind,  that  I  must  sustain  my  propositions  by 
influential  and  reliable  authorities,  as  Well  as  by  argument. 

I  proceed  fir,st  to  show  what  money  is,  and. will  then  demonstrate  that 
Congress  has  power  to  convert  the  Treasury  Certificates  into  money,  by 
making  them  a  legal  tender.  The  cause  for  which  I  plead,  is  the  cause  of 
Civil  and  Religious  Liberty,  of  right,  of  justice,  of  good  faith,  of  pecuniary 
independence,  of  human  progress  and  prosperity,  and  I  beseech  you,  the 
Congress,  the  Legislatures  of  the  several  States,  and  the  people,  for  the 
sake  of  that  cause,  earnestly  to  consider  the  facts  and  argixments  which  I 
respectfully  submit  in  support  of  it.  DUFF    GREEN. 

WHAT  IS   MONEY? 

Worcester  defines  MONEY  to  be  stamped  metal,  generally  gold,  silver 
or  copper,  used  in  traffic,  or  as  the  measure  of  price :   coin. 

Money  differs  from  uncohvsd  silver  in  that  the  quantity  of  silver  in  each  piece  of  money 
is  ascertained  by  the  stamp  it  bears,  which  is  a  public  voucher. — Locke. 

2.  Cash  generally ;  any  current  token  or  representative  of  value,  as  bank  notes  ex- 
'  changeable  for  coin,  notes  of  hand,  accepted  bills  on  mercantile  houses,  drafts,  etc. 

Wright. 
Syn. — Money,  originally  stamped  coin,  is  now  applied  to  whatever  serves  as  a  circu- 
lating medium,  including  bank  notes  and  drafts,  as  well  as  metallic  coins  ;  cash  is  ready 
money,  and  is  sometimes  restricted  to  coin,  or  metallic  money  bearing  a  legal  stamp  ; 
but  it  is  commonly  used  to  include  bank  notes,  drafts,  etc. 

McCulloch,  in  his  Commercial  Dictionary,  says  : 

When  the  division  of  labor  was  first  introduced,  commodities  were  directly  bartered 
for  each  other ;  those,  for  example,  who  had  a  surplus  of  corn  and  were  in  want  of 
wine,  endeavored  to  find  out  those  who  were  in  the  opposite  circumstances,  or  who  had 
a  surplus  of  wine  and  wanted  corn,  and  they  exchanged  the  one  for  the  other.  It  is 
obvious,  however,  that  the  power  of  changing,  and  consequently  of  dividing  employ- 
ment, must  have  been  subjected  to  perpetual  interruptions,  so  long  as  it  was  restricted 
to  mere  barter.  The  extreme  inconveniences  attending  such  situations  must  early  have 
forced  themselves  on  the  attention  of  every  one.  Efforts  would,  in  consequence,  be 
made  to  avoid  them,  and  it  would  speedily  appear  that  the  best,  or  rather  the  only 
way,  in  which  this  could  be  effected,  was  to  exchange  either  the  whole  or  part  of  one 
surplus  produce  for  some  commodity  of  known  value  and  in  general  demand,  and  which, 


consequently,  few  persons  would  be  inclined  to  refuse  to  accept  as  an  equivalent  for 
whatever  they  had  to  dispose  of.  *****  .  Now  this  commodity,  whatever  it 
may  be,  is  money.  ■ 

An  Infinite  variety  of  commodities  have  been  used  as  money  in  different  countries  and 
periods.  But  none  can  be  advantageously  used  as  such  unless  it  possesses  several  very 
peculiar  qualiti.es.  The  slightest  reflection  on  the  purpose  to  which  it  is  applied  must 
indeed  be  sufficient  to  convince  every  one,  that  it  is  indispensable,  or  at  least  exceed- 
ingly desirable,  that  the  commodity  selected  to  serve  as  money  should  bo  divisible  into 
the  smallest  portions.  2d.  That  it  will  admit  of  being  kept  for  an  indefinite  period 
without  deteriorating.  3d.  That  it  should,  by  possessing  great  value  in  small  bulk,  be 
capable  of  being  easily  transposed  from  place  to  place.  4th.  That  one  piece  of  money, 
of  a  certain  denomination,  should  always  be  equal  in  magnitude  and  quality  to  every 
otheV  piece  of  money  of  the  same  denomination.  6th.  That  its  value  should  be  com- 
paratively steady,  or  as  little  subject  to  variation  as  possible.  Without  the  first  of 
these  qualities,  or  the  capacity  of  being  divided  into  portions  of  every  different  magni- 
tude and  value,  money,  it  is  evident,  would  be  of  almost  no  use,  and  could  onlv  be 
exchanged  for  the  few  commodities  that  might  happen  to  be  of  the  same  value  as  its 
indivi^ble  portions,  or  as  whole  multiples  of  them.  Without  the  second,  or  the  capacity 
of  being  kept  or  hoarded  without  deteriorating,  no  one  would  choose  to  exchange 
commodities  for  money,  except  only  when  he  expected  to  be  able,  speedily,  to  re- 
exchange  that  money  for  something  else  Without  the  third,  or  facility  of  transport- 
ation, money  could  not  be  commercially  used  in  transactions  between  places  at  consid- 
erable distance.  Without  the  fourth,  or  perfect  sameness,  it  would  be  extremely  difficult 
to  appreciate' the  value  of  different  pieces  of  money  ;  and  without  the  fifth,  or  compara- 
tive steadiness  of  value,  money  could  not  serve  as  a  standard,  by  which  to  uieasure  the 
value  of  other  commodities,  and  no  one  would  be  disposed  to  exchange  the  produce  of 
his  industry  for  an  article  that  might  shortly  decline,  considerably  in  Us  power  of  pur- 
chasing. :T  * 

The  union  of  the  different  qualities  of  comparative  steadiness  of  value,  divisibility- 
durability,  facility  of  transportation,  and  perfect  sameness  in  the  precious  metals, 
doubtless  formed  the  irresistible  reason  that  has  induced  every  civilized  community  to 
employ  them  as  money. 

John  Taylor,  Jr.,  defines  money  to  be  ".  a  token  issued  by  G-OTerument. 
aud  made  a  tender  in  payment  of  debts." 

Adam  Smith  said  : 

A,  paper  money  consisting  in  bank  notes,  issued  by  a  people  of  undoubted  credit, 
payable  upon  demand,  without  condition,  and  in  fact  always  readily  paid  as  soon  as 
presented,  is,  in  every  respect,  equal  in  value  to  gold  and  silver  money,  since  gold  and 
silver  money  can  at  any  time  be  had  for  it.  Whatever  is  either  bought  or  sold  for  such 
paper  must  necessarily  be  bought  or  sold  as  cheap  as  it  could  have  been  for  gold  i»nd 
•ilver. 

Bicardo  says  : 

If  there  was  perfect  security  that  the  power  of  issuing  paper  money  would  not  be 
abused ;  that  is,  if  there  was  perfect  security  for  its  being  issued  in  such  quantities  as- 
to  preserve  its  value  relatively  to  the  mass  of  circulating  commodities  nearly  uniform' 
the  precious  metals  might  be  entirely  discarded  from  circulation. 

Mr.  Calhoun,  in  his  speech  in  the  United  States  Senate  upon  the  re- 
moval of  the  deposits  on  the  3d  of  January,  1834,  said  : 

Whatever  the  Government  receives  and  treats  as  money,  is  money  in  effect ;  and  if  it 
be  money,  they  have  the  right  under  the  Constitution  to  regulate  it      *     *     *     *     * 

If  Congress  has  the  right  to  receive  anything  else  than  specie  in  its  dues,  they  have 
the  right  to  regulate  its  value;  and  have  aright,  of  course,  to  adopt  all  necessary  and 
•  proper  means,  in  the  language  of  the  Constitution,  to  effect  its  object. 

McCulloch,  under  the  title  of  "  money,"  says  : 

No  certain  estimate  can  be  formed  of  the  quantity  of  money  required  to  conduct  the 
business  ol  any  country ;  this  quantity  being  in  all  cases  determined  by  the  value  of 


money  itself,,  the  service  it  has  to  perform,  and  the  devices  used  for  economizing  its 
employment.  Generally,  however,  it  is  verv  considerable,  and  when  it  consists  wholly 
of  ,gokl  and  silver,  it  occasions  a  very  heavy  expense.  There  can,  indeed,  be  no  doubt 
that  the  wish  to  lessen  this  expense  has  been  one  of  the  chief  causes  that  have  led  all 
civilized  and  commercial  nations  to  fabricate  a  portion  of  their  money  of  some*  less 
valuable  material.  Of  the  various  subs'itutes  resorted  to  for  this  purpose,  paper  is,  in 
all  respects^  the  most ;  eligible.     *****     Hence,  the  origin  of  bank  notes. 

These  extracts  not  only  prove  that  money  may  be'  made  of  paj)er,  but 
that  all  civilized  and  commercial  people  have  used  paper  money  because  it  , 
is  more  convenient  and  cheaper  than  specie,  and  that  if  not  issued  in  excess, 
it  is  more  valuable  than  specie. 

In  his  speech  upon  the  Sub-Treasury,  Dec.  19th,  1887,  Mr.  Calhoun 
said:  .  ' 

I  am  of  the  impression,  to  make  this  great  measure,  successful,  and  secure  it  against 
reaction,  some  stable  and  safe  medium  of  circulation,  to  take  the  place  of  bank  notes, 
ought  to  be  issued.  I  intend  to  propose  nothing.  It  would  be  impossible,  with  so  great 
a  weight  of  opposition,  to  pass  any  measure  without  the  entire  support  of  the  Admin- 
istration ;  and  if  it  were  possible,  it  ought  not  to  be  attempted  where  so  much  must 
depend  on  the  mode  of  execution.  The  best  measure,  that  could  be  devised  might  fail 
and  impose  a  heavy  responsibility  on  its  author,  unless  it  met  with  the  hearty  approba- 
tion of  those  who  are  to  execute  it.  1  now  intend  merely  to  throw  out  suggestion?,  in 
order  to  excite,  the  reflection  of  others  on  a  subject  so  delicate  and  of  so  much  import- 
ance— acting  on  the  principle  that  it  is  the  duty  of  all,  in  so  great  a  juncture,  to  present 
their  views  without  reserve. 

It  is  then  my  impression,  that  in  the  present  condition  of  the  *drld,  a  paper  currency 
in  some  form,  if  not  necessary,  is  almost  indispensable  in  financial  and  commercial  opera- 
tions of  civilized  and  extensive  communities.  In  many  respects,  it  has  a  vast  superiority 
over  metallic  currency,  especially  in  great  and  extended  transactions,  by  its.  greater 
cheapness,  lghtness.  and  the  facility  of  determining  the  amount.  The  great  desidera- 
tum is  to  ascertain  what  description  of  paper  has  the  requisite  qualities  of  being  free 
from  fluctuation  in  value  and  liability  to  abuse  in  the  greatest  pfy-fection.  I  have 
shown,  I  trust,  that  the  bank  notes  do  not  possess  these  requisites  in  a  degree  sufficiently 
high  for  this  purpose.         k. 

I  go  further.  It  appears  to  me,  after  bestowing  the  best  reflection  I  can  give  the 
subject,  that  no  convertible  paper — that  is,  uo  paper  whose  credit  rests  upon  a  promise 
to  pay,  is  suitable  for  currency.  It  is  the  form  of  credit  proper  in  private  transactions, 
between  man  and  man,  but  not' for  a  standard  of  value,  to  perform  exchanges  generally 
which  constitute  the  appropriate  functions  of  money  or  currency.       ***** 

On  what,  then,  ought  a  paper  currency  to  rest  j  I  would  say,  on  demand  and  supply, 
simply,  which  regulates  the  value  of  everything  else — the  constant  demand  which  the 
Government  has  on  the  community  for  its  necessary  supplies.  A  medium,  resting  on 
this  demand,  which  simply  obligates  the  Government  to  receive  it  in  all  of  its  dues,  to 
the  exclusion  of  everything  else,  except  gold  and  silver — and  which  shall  be  optional 
with  those  who  have  demands  on  the  Government  to  receive  or  not,  would,  it  seems  to 
me,  be  as  little  liable  to  abuse  as  the  power  of  coining.  It  would  contain  within  itself 
a  self-regulating  power.  It  could  only  be  issued  to  those  who  had  claims  on  the  Gov- 
ernment, and  to  those  only  with  theiv  consent,  and,  of  course,  at  or  above  par  with  gold 
and  silver,  which  would  be  its  habitual  state  ;  for,  so  far  as  the  Government  was  con- 
cerned, it  would  be  equal,  in  every  respect,  to  gold  and -silver,  and  superior  in  many, 
particularly  in  regulating  the  distant  exchanges  of  the  country. 

Nothing  but  experience  can  determine  what  amount  and  of  what  denominations  might 
he  safely  issued  ;  but  it  may  be  safely  assumed  that  the  country  would  absorb  an  amount 
greatly  exceeding  its  annual  income.  Much  of  its  exchanges,  which  amount  to  a  vast 
sum,  as  well  as  its  banking  business,  would  revolve  about  it,  and  many  millions  would 
thus  be  left  in  circulation  beyond  the  demands  of  the  Government.  It  may  throw  some 
light  on  this  subject  to  state  that  North  Carolina,  just  after  the  Revolution,  issued  a 
large  amount  of  paper,  which  was  made  receivable  in  dues  to  her.  l£  was  also  made 
.a.  legal  tender,  but  which,  of  course,  was  not  obligatory  after  the  adoption  of  the  Fed- 


eral  Constitution.    A  large  amount,  say  between  four  and  five  hundred  thousand  dollars,, 
remained  in  circulation  after  that  period,  and  continued  to  circulate  for  more  than  twenty 
years,  at  par  with  gold«ind  silver  during  the  whole  time,  with  no  other  advantage  than 
being  received  in  the  revenue  of  the  State,  which  was  much  less  than  $1(0,000  per 
annum.    I  speak  on  the  information  of  citizens  of  that  State  in  whom  I  can  rely. 

Again,  in  a  speech  of  Oct.  3,  1837,  after  demonstrating  that  in  conse- 
quence of  -the  receipt  of  bank  notes  by  the  Government  they  had  in  a 
great  measure  superseded  the  use  of  the  precious  metals,  Mr.  Calhoun 
said : 

I  am  not  the  enemy  but  the  friend  of  credit.  Not  as  a  substitute,  but  the  associate, 
and  the  assistant  of  the  metals.  In  that  •  capacity  I  hold  credit  to  possess,  in  many 
respects,  vast  superiority  over  the  metals  themselves  I  object  to  it  in  the  form  which 
it  has  assumed  in  the  banking  system,  for  reasons  which  are  neither  light  or  few,  and 
that  neither  have  been  or  can  be  answered.  The  question  is  not  whether  credit  can  be 
dispensed  with,  but  what  is  the  best  possible  form — the  most  stable,  least  liable  to 
abuse,  and  the  most  convenient  and  cheap.  I  threw  out  some  ideas  upon  this  mostjm- 
portant  subject  in  my  opening  remarks.  I  have  heard  nothing  to  change  my  opinion. 
X  believe  that  Government  credit,  in  the  form  1  suggested,  combines  all  the  requisite- 
qualities  of  a  credit  circulation  in  the  highest  degree,  and,  also,  that  the  Government 
ought  not  to  use  any  other  credit  but  its  own  in  its  financial  operations. 

Weaie  told  that  the  form  I  suggested  is  but  a  repetition  of  the  old  Continental 
money — a  ghost  that  is  ever  conjured  up  by  all  who  wish  to  give  the  banks  an  exclusive 
monopoly  of  Government  credit.  The  assertion  is  not  true;  there  4s  not  the  least 
analogy  between  them.  The  one  was  a  promise  to  pay  when  there  was  no  revenue,  and 
the  other  to  receive  in  the  oues  of  the  Government  when  there  was  an  abundant 
revenue. 

We  are  told  that  there  is  no  instance  of  a  Government  paper  that  did  not  depreciate. 
In  reply,  I  affirm  that  there  is  none,  assuming  the  form  I  propose,  that  ever  did  depre- 
ciate. Whenever  a  paper,  receivable  in  the  dues  of  Government,  has  anything  like  a 
fair  trial,  it  has  succeeded.  Instance  the  case  of  North  Carolina,  referred  to  in  my 
opening  remarks.  The  drafts  of  the  Treasury  at  this  im>ment,  with  all  their  encun;- 
brances,  are  nearly  at  par  with  gold  and  silver.  1  might  add  the  instance  alluded  to  by 
the  distinguished  Senator  from  Kentucky,  in  which  he  admits  that  as  soon  as  the  excess 
of  the  issue  of  the  Commonwealth  Bank  of  Kentucky  were  reduced  to  the  proper  point  its 
notes  rose  to  par.  The  case  of  Russia  might  also  be  mentioned.  In  1827  she  had  a  fixed 
paper  circulation,  in  the  form  of  Bank  Notes,  but  which  were  inconvertible,  of  upjvards  of 
$120,000,000,  estimated  in  the  metallic  ruble,  and  which  had  for  years  remained  without 
fluctuation,  having  nothing  to  sustain  it  but  that  it  was  received  in  the  dues  of  the 
Government,  and  that  too  with  a  revenue  of  only  about  $90,000,000  annually.  I  speak 
on  the  authority  ot  a  respectable  traveller.  Other  instances  might  no  doubt  be  added, 
but  it  needs  no  such  support.  How  can  a  paper  depreciate  which  the  Government,  is 
bound  to  receive  in  all  its  payments,  and  while  those  to  whom  payments  are  to  be  made 
are  under  no  obligation  to  receive  it  ?  From  its  nature  it  can  only  circulate  when  at  par 
with  gold  and  silver,  and  if  it  should  depreciate  none  could  be  injured  but  the  Govern- 
ment. • 

It  will  be  seen  that  his  purpose  was  to  organize  a  financial  system  for 
the  United  Slates,  in  which  the  credit  of  the  Government  should  be 
received  and  paid  away  at  par  with  gold.  Small  as  the  minority  in  which 
he  and  his  friends  were,  under  the  pressure  of  circumstances  and  the  force 
of  his  arguments,  Congress,  in  1846,  passed  an  act  which,  as  quoted  by 
Colwell,  provides  "  that  the  Treasurer  of  the  United  States,  the  Treasurer 
of  the  Mint  of  the  United  States,  the  Treasurers,  and  those  acting  as  such " 
at  the  various  Branch  Mints,  all  Collectors  of  Customs,  all  Surveyors  of 
the  Customs  acting  also  as  collectors,  all  Assistant  Treasurers,  all  receiver,'; 
of  public  money  at  the  several  land   offices,  all  Postmasters,  and  all  public 


officers  of  whatever  character,  be,  and  they  are  hereby  required  to  keep 
'safely,  without  loaning,  using,  depositing  in  banks,  or  exchanging  for  other 
funds  than  he  is  allowed  by  this  act, 'all  the  public  money  collected  by 
them,  o^  otherwise,  at  any  time,  placed  in  their  possession  or  custody,  till 
the  same  is  ordered  by  the  proper  department  or  officer  of  the  Government 
to  be  transferred  or  paid  out ;  that  all  collectors  and  receivers  of  public 
money  of  every  character  and  description  shall  so  frequently  as  they  may 
■be  directed  by  the* Secretary  of  the  Treasury  or  the  Postmaster  General, 
to  pay  over  to  the  Treasurers  of  their  respective  districts  all  public  money 
.collected  by  them  or  in  their  hands  ;  and" it  shall  be  the  duty  of  the  Secre- 
tary and  the  Postmaster  General  respectively,  to  order  such  payments  by 
the  said  collectors  and  receivers  at  all  'said  places,  at  least  as  often  as  once 
in  each  week,  and  as  much  more  frequently  in  all  cases  as  they  in  their  dis- 
cretion may  think  proper."  It  is  farther  enacted  in  the  same  statute, 
"That  on  and  after  the  first  of  January,  1847,  all  sums  payable  to  the 
United  States  shall  be  paid  in  gold  or  silver  coin,  or  in'Treasury  Notes 
issued  by  authority  of  the  United  States,  that  on  and  after  the  first  of 
April,  1847,  all  payments  shall  be  made  in  gold  or  silver  coin,  or  in  Treas- 
ury Notes,  if  the  creditor  agrees  to  receive  said  notes  in  payment." 

Oolwell  quotes  from  the  Secretary  of  the  .Treasury's  (Mr.  Guthrie)  re- 
port, of  December  3d,  1855,  as  follows  : 

The  Independent  Treasury  Act  still  continues  eminently  successful  in  all  its  opera- 
tions. ^  The  transfers,  for  disbursements,  during  the  fiscal  year,  to  the  amount  of 
$39,407,674  03,  have  been  made  at  a  cost  of  $10,762  35,  while  the  premium  on  the  sale 
of  drafts  has  amounted  *o  830  431.87.  The  receipts  and  expenditures  during  the  fiscal 
year  amounted  to  $131,413,859  59  have  all  been  in  the  Constitutional  currency  of  gold 
and  silver  without  any  perceptible  effect  upon  the  currency  or  upon  the  healthy  business 
operations  of  the  country. 

And  again  from  his  annual  report,  December  1st,  1856 : 
The  amount  transferred,  for  disbursement,  during  the  past  fiscal  year  was 
$38,088,1 13.92,  at  a  cost  of  $12,954.87  ;  while  the  premiums  paid  ou  sale  of  Treasury 
drafts  have  been  §54,924.16,  leaving  §41,978  29  over'and  above  the  expenses.  *  * 
The  receipts  and  expenditures,  during  the  fiscal  year,  have'amouuted  in  the  aggregate  to 
$146,866,933.48',  and  have  all  been  paid  in  the  Constitutional  currency  of  gold  and  silver 
without  any  disturbing  effect  upon  the  currency,  the  banks,  or  business  of  the  country. 

Commenting  upon  this  act,  Col  well  says  : 

It  proposed  that  all  payments  to  :ind  from  the  Treasury  should  be  made  in  gold  and 
silver  coin,  or  in  Treasury  notes  issued  under  the  authority  of  the  United  .States.  Now 
this  was  offering  to  the  creditors  of  the  Government  their  choice  of  specie  or  the  very 
best  ■currency  ivhich  could  be  issued  hi  the  country.  No  medium  of  payment  which  could 
be  devised  would  better  accommodate  the  public  creditors  than  Treasury  Notes,  issue'd 
in  forms  and  denominations  to  suit  the  wants  and  conveniences  of  the  people. 

I  quote  these  extracts  to  demonstrate  the  correctness  and'  wisdom  of  Mr. 
Calhoun's  views  of  the  proper  use  of  public  credit,  intending,  as  I  pro- 
gress, to  cite  other  faets,  stronger  if  possible  than  these,  to  enforce  the 
necessity  of  adopting  the  measures  which  I  propose.  It  is  true  that  the 
value  of  Treasury  Notes, -under  the  system  adopted  by  the  Federal  Govern- 
ment, was  kept  at  par  with  gold  because  the  banks  were  required  to  redeem 
their  notes  with  specie.  I  propose  to  make  our  Treasury  Notes  convertible 
into  coupon  bonds,  worth  as  much  as  specie,  and  thus  maintain  their  value. 


8   • 

CAN  CONGRESS  MAKE  TREASURY  NOTES  A  TENDER  T 

In  his  speech  upon  tRe  Sub-Treasury,  delivered  in  the  Senate  March 
10th,  1838,  Mr.  CalhouD  said: 

I  do  not  deem  it  necessary  to  inquire  whether,  in  conferring  the  power  toQoin  money 
and  regulate  the  value  thereof,  the  Constitution  intended  to  limit  the  power  strictly  tr> 
coining  money  and  regulating'  its  value,  or  whether  it  intended  to  confer  a. more  general  * 
power  over  the  currency  ;  nor  do  I  intend  to  inquire  whether  the  word  coin  is  limited  simply 
to  metals,  or  may  be  extended  to  other  substances,  if  through  a  gradual  change  they  may 
become  the  medium  of  the  general  circulation  of  the  world.  Whatever  opinion  there  mnT. 
be  entertained  in  reference  to  them,  we  must  all  agree,  as  a  fixed  principle  in  our  system 
of  thinking  on  Constitutional  questions,  that  the  power  under  consideration,  like  other 
powers,  is  a  trust  power,  and  that,  like  all  such  powers.it  must  be  so  exercised  as  i<* 
eifect  the  object  of  the  trust,  as  far  as  it  may  be  practicable ;  nor  can  we  disagree  that  the 
object  of  the  power  was  to  secure-  to  these  States  a  safe,  uniform,  and  stable  currencv. 
The  nature  of  the  power,  the  terms  u-ed  to  convey  it,  the  history  of  the  times,  thV 
necessity,  with  the  creation  of  a  common  Government,  of  having  a  common  and  uniform 
Circulating  medium,  and  the  power  conferred  to  punish  those  who,  by  counterfeiting,  may 
attempt  to  debase  and  degrade  the  coins  of  the  country,  u.11  proclaim  this  to  be  the 
object.  *  *  *  *    '         *  *  *  *  *  ■  * 

If  Congress  has  a  right  to  receive  anything  else  than  specie  in  its  dues,  they  have  the 
tight  to  regulate  its  value,  and  have  a  right,  of  course,  lo  adopt  all  necessary  and  proper 
means,  in  the  language  of  the  Constitution,  to  effect  the  object. 

Again,  in  reply,  to  Mr.  Webster,  March  22d,  1888,  Mr.  Calhoun  said  : 
I  now  undertake  to  affirm  positively,  and  without  the  least  fear  that  I  can  be  answered 
— what  heretofore  I  have  but  suggested — that  a  paper,  issued  by  Government,  with  the 
simple  promise  to  receive  it  in  all  itg  dues,  leaving  its  creditors  to  take  it  or  gold  and 
silver,  at  their  option,  would,  to  the  extent  that  it  would  circulate,  form  a  perfect  paper 
circulation,  which  could  not  be  abused  by  the  Government ;  that  it  would  be  as  steady 
and  uniform  in  value  as  the  metals  themselves  ;  and  that  if,  by  possibility,  it  should  de- 
preciate, the  loss  would  fall,  not  on  the  people,  but  on  the  Government  itself;  for  the 
only  effect  of  depreciation  would  be  virtually  to  reduce  the  taxes,  to  prevent  which  the 
interest  of  the  Government  would  be  a  sufficient  guarantee.  I  shall  not  go  into  the 
discussion  now,  but  on  a  suitable  occasion  I  shall  be  able  to  make  good  every  word  J 
have  r?ttered.  Iwvuld  be  able  to  do  more — to  prove  thai  it  is  within  the  Constitutional 
power  of  Congress  to  use  such  a  paper,  in  the  mauageiiument  of  its  finances,  according  tit 
the  most  rigid  rule  of  construing  the  Constitution j  and  that  those,  at  least,  who  think 
that  Congress  can  authorize  the  notes  of  State  corporations  to  be  received  in  the  public- 
dues,  ;. re  estopped  from  denying  itsjright  to  receive  its  own  paper.  If  it  can  virtually 
indorse  by  law,  on  the  notes  of  specie  paying  banks,  "  Receivable  in  payment  of  the 
public  dues,"  it  surely  can  order  the  same  words  to  be  written  on  a  blank  piece  of  paper. 

As  the  power  to  coin  "  money  "  and  regulate  its  value,  and  to  piss  all 
laws  necessary  and  proper  to  effect  that  object  is  expressly  given  to 
Congress,  and,  as  the  purpose  of  the  Constitution  was*  to  enable  Congress  to 
give  to  the  States  "  a  safe,  uniform,  and  stable  currency/'  Mr.  Calhoun 
•refers  to  "the  history  of  the  times,  and  the  necessity  with  the  creation  of 
fe.  common  government  of  having  a  common  circulating  medium,"  in 
support  of  his  proposition,  that  whatever  the  Government  may  receive  and 
pay  away  as  money  is  money,  and  that  it  is  the  duty  of  Congress  to'reguiate 
its  value. 

What  was  the  history  of  the  times  ?  and  what  was  the  necessity  for 
creating  a  common  and  uniform  circulating  medium  ? 

Ayres,  in  his  Financial  Register  for  1857,  in  his  chapter  on  Banks  and 
Banking  in  the  United  States,  says  : 

The  first  description  of  paper  money,  as  far  back  as  1690,  was  in  form  of  Bills  of 
Credit,  secured  on  the  property  and  revenues  of  the  Colony,  but  war. soon  forced  th* 


colonists  to  increase  this  currency  to  such  an  extent  as  greatly  to  depreciate  its  value 
^compared  with  specie.  This  formed  a  very  powerful  difficulty  with  the  States,  yet  it 
was  made  a  legal  tender,  and  received  in  payment  of  taxes  and  debts  in  New  England 
at  the  rate  <tf  6s.  the  Spanish  dollar ;  in  New  York  at  8s.,  and  in  Pennsylvania  at  7s.  6d. 
These  variatRns  in  the  nominal  value  of  the  currency  created  the  greatest  confusion, 
which  may  be  understood  by  the  difference  between  its  nominal  and  real  value  in  1748, 
when  these  bills,  to  the  amount  of  $3,000,000.  were  issued.  A  bill  on  London  for  £100 
in  specie  was  equivalent  to  a  bill  for  £1,100  of  this  paper  money  of  New  England ;  for. 
£190  of  New  York;  for  £190  of  East  Jersey  ;  for  £180  of  West  Jersey  ;  for  £180  of 
Pennsylvania;  for  £200  of  Maryland;  for  £125  of  Virginia;  for  £1,000  of  North 
Carolina;  and  for  £700  of  the  paper  currency  of  youth  Carolina.  A  part  of  ihese 
issues  were  soon  afterward  redeemed  at  two  shillings  in  the  pound,  but  the  War  of 
Independence,  in  1775,  called  forth  the  increased  demand  for  an  extended  currency, 
so  that,  in  September  of  1779,  $160,000,000  were  issued  ;  when  Congress  passed  a  law 
that  it  should  never  exceed  $2j00,000,o00,  which  sum  it  reached  at  the  end  of  th« 
year..  In  1780  and  1781  these  bills  ceased  to  have  currency. 
•  » 

Such  was  the  "history  of  the  times,"  which  fully  explains  the  necessity 

of  giving  to  Congress,  as  the  common  agent  of  all  the  States,  the  exclusive 
and  unrestricted  power  to  coin  money  and  regulate  its  value.  The  power  is 
not  to  coin  gold  and  silver  money.  It  is  to  coin  money.  This,  brings  us.  to 
the  simple  question  :  What  is  money?  And  inasmuch  as  the  unrestricted 
power  to  coin  money  and  regulate  its'  value  was  given  to  Congress,  without 
reference  to  the  material  of  which  it  is  to  be  coined,  the  power  to  deter- 
mine of  what  material  it  may  be  coined  as  well  as  the  fineness,  weight  and 
other  properties  of  money,  is  necessarily  vested  in  the  discretion  of  Con- 
gress- For  the  clause  forbidding  the  States  to  issue  bills  of  credit,  or  to 
make  anything  else  than  gold  and  silver  a  legal  tender  proves  that  the  pro- 
priety of  our  "issue  of  paper  money  was  under  the  consideration  of  the 
Convention  which  framed  the  Federal  Constitution,  and  the  fact  that  whilst 
the  unlimited  power  to  coin  money  and  to  regulate  its  value  without 
reference  to  gold,  silver,  or  paper,  was  given  to  Congress,  and  the  power  to 
iasue  paper  money  was  not  forbidden  to  Congress  but  was  forbidden  to  the 
States,  is  conclusive  to  prove  that  it  was  not  the  purpose  of  the  Convention 
to  forbid  the  issue  of  paper  money  by  Congress. 

That  Mr.  Calhoun  would  concur  in  this  construction  of  the  power  of 
Congress,  appears  in  the  quotation  given  above.  He  said :  "Nor  do  I 
intend  to  inquire,  whether  the  word  coin  is  limited  simply  to  metals,  or 
may  be  extended  to  other  substancesj  if  through  a  gradual  change  they 
may  become  the  medium  of  the  general  circulation  of  the  world."  There 
can  be  no  other  interpretation  to  this  quotation  than  that,  if  under  any 
circumstances,  it  becomes  necessary  to  issue  paper  money,  then  Congress 
may,  if  they  deem'  it  expedient,  coin  paper  money,  and  have  power  to  pass 
all  laws  necessary  and  proper  to  regulate  the  value  of  the  paper  money 
thus  coined,  and  consequently  to  make  it  a  tender. 

In  this  view  of  the  power  of  Congress,  the  Treasury  Notes  or  Certifi- 
cates issued  and  paid  away  by  authority  of  Congress,  are  money,  and  the 
only  question  is,  is  it  necessary,,  and  proper  to  make  them  a  legal  tender  as 
a  means  of  regulating  their  value  ?  If  so,  then  the  power  is  vested  in 
Congress. 


10 

CONGRESS  CANNOT  REGULATE  TIIR  VALUE  OF  GOLD  SO' 

AS  TO  PREVENT  FLUCTUATIONS  IN  THE  QUANTITY 
AND  VALUE  OF  A  METALLIC  CURRENCY. 

The ■.  EiHrJ/nrgh  Review,  of  February,  1820,  in   a  chapter  0n  Banking, 

Let  us  then  endeavor  briefly  to  inquire  into  the  circumstances  that  determine  the 
quantity  of  money  in  a  country  •  first,  when  the  currency  is  wholly  of  gold  or  silver; 
second,  when  it  consists  wholly  of  paper  that  is  made  a  legal  tender,  but  which  is  not 
convertible  at  pleasure  into  the  precious  metals;  and  third,  when  the  currency  consists 
partly  of  coin  and  partly  of  paper,  immediately  convertible  into  coin. 

With  respect  to  the.first,  or  that  in  which  the  currency  of  any  given  country  consists 
entirely  of  ; be  precious  metals,  it  is  evident,  inasmuch  as  they  are  always  in  demand, 
and  can  be  imported  and  exported  at  a  very  small  expense,  that  the  quantity  of'precious 
raetals  which  such  a  country  would,  in  all  ordinary  ca*es,  use  as  money,  would  be  lim- 
ited tq  the  quantity  which  was  required  to  preserve ™.eir  .value  at  the  same  level  in  it, 
as  in  other  countries.  If  on  the  <5ne  hand,  any  greater  additions  were  made  to  the 
amount  of  gold  or  silver  in  circulation,  than  were  required  to  preserve  the  currency  at 
this,  its  proper  level,  its  value  would  fall,  and  there  would,  in  consequence,  be  an  imme- 
diate expottalion  of  the  precious  metals ;  and  if.  On  the  other  hand,  the  amount  of  gold 
or  silver  in  circulation  were  unduly  diminished,  the  opposite  effects  would  be  produced  ; 
the  value  of  the  currency  would  tnen  be  raised  above  its  proper  level,  and  there  would 
bean  importation  of  the  precious  metals  from  all  the  surrounding"  countries  to  restore 
that  equality  of  value  which  could  not  in  either  case  be -permanently  or  even  consider 
ably  derauged.  ,  ■ 

In  the  second  case,  we  have  supposed  that  of  a  country  with  a  paper  currency  declared 
to  be  a  legal  render,  but  not  convertible  at  pleasure  into  the  precious  metals,  it  is  evi- 
dent, inasmuch  as  such  a  paper  caA  neither  be  exported  to  other  countries,  when  it  is 
•issued  in  excess,  nor  imported  when  the  issues  are  unduly  limited;  that  it  is-  not  pos- 
sessed of  the  same  principle  c  self-contraction  and  expansion  inherent  in  a  currency 
consisting  of  the  precious  metals ;  and  that,  consequently,  its  value  mast  always  depend 
on  the  extent  to  which  it  has  bean  issued  compared  with  the  demand..  ***** 
The  essential,  difference,  then,  between  a  currency  consisting  wholly  of  the  precious 
metals  and  one  consisting  wholly  of  inconvertible  paper,  is  this,  that  the  value  of  the 
former,  in  any  particular  country,  can  never  differ,  either  permanent!)/  or  considerably 
■from  its  value  in  others  ;  and  that  it's  value,  as  compared  with,  commodities,  depend  on  the 
comparative  cost  of  their  and  its  production ;  whereas,  the  value  of  the  latter,  in  any  one 
country,  may  vary  to  any  conceivable  extent  from  its  value  in  others;  and  its  value,  as 
compared  with  commodities,  does  not  depend  on  the  cost  of  .producing  it  and  them,  but 
to  the  extent  to  which  it  has-been  issued  compared  to  the  demand.  *  *  *  *  * 
It  re-nits  from  these  principles,  that  convertibility  into  gold  and  silver,  at  the  pleasure  of] 
the  holder,  is  not  necessary  to  give  value  to  paper  money;  and  that,  if  perfect  security 
'could  be  obtained  that  the  power  of  issuing  would  not  be  abused,  or  that  it  would 
always  be  issued  irj  such  quantities  as  would  render  a  one  pound  note  uniformly  equiva- 
lent to  the  quantity  of  standard  gold  bullion  contained  in  a  sovereign,  the  precious 
metals  might  be  entirely  dispensed  with  as  a  medium  of  barter,  or  used  onlv  to  serve-  as 
small  change.  *■  *  *'  f  *  *  _  *    ■    '     *  * 

We  are  naturally  led  to  the  consideration  of  the  third  and  most  important  head  in  out- 
inquiry,  or  to  that  which  has  for  its  object  to  discover  the  circumstances  which  deter- 
mine the  amount  and  value  of  the  currency  of  a  country  when  it  consists  partly  of  coin 
and  partly  of  paper,  immediately  convertible  into  coin. 

It  appears,  from  what  has  been  already  stated,  that  an  excessive  quantity  of  tire 
precious  metals  can  never  be  imported  into  any  country,  which  allows  them  to  be  freely 
sent  abroad,  without  occasioning  their-  instant  exportation.  But  when  the  currency  ot 
any  particular  country,  as  of  England,  consists  partly  of  the  precious  metals  and  partly 
of  paper,  convertible  into  them,  the  effects  produced  by  an  over  issue  of  paper  are  the 
same  as  those  resulting  from  an  over  issue  of  gold  or  silver.  The  excess  of  paper  will 
not -be  indicated  by  a  depreciation  or  fall  in  the.  value  of  paper,  as  compared  with 
gold  ;  but  bi/  a  depreciation  of  the  value  of  the  whole  currency,  gold  as  well  as  paper,  a< 


11 

<-*>mpared  with  that  of  other  States.  *****  it  is  obvious  that  this  issue  of 
paper  must,  have  precisely  the  same  effect  ou  the  value  of  money  as  the  issue  of  addi- 
tional sovereigns.  There  cannot,  it  is  clear,  be  any  depreciation  in  the  value  of  paper  as 
compared  with  gold  ;  for  gold  may  be  immediately  obtained  in  exchange  for  it,  and  it  is 
as  readily  recajved  in  all  payments  throughout  the  country.  The  effect  of  increased 
issues  of  notes,  immediately  convertible  into  gold,  is  not,' therefore,  to  cause  any  discre- 
pancy between  the  value  of  paper  and  the  value  of  gold,  in  the  home  market,  but  to 
increase  the  amount  of  the  currency,  and  by  rendering  it  redundant  or  depreciated*  as 
compared  with  that  of  other  countries,  to  depre-s  the  nominal  exchange;  and  thus,  inas- 
much as  notes  do  not  circulate  abroad,  to  cause  the  exportation  of  coin,  and,  compe- 
<juentli/,  a  drain  upon  the  bank. 

I  have  quoted  thus  at  length  from  the  Review,  because  it  gives  the  argu- 
ment relied  upon  by  the  advocates  of  a  currency  convertible  into  specie. 
It  is  the  argument  of  the  Bank  of  England,  and  lies  at  the  foundation  of 
the  power  and  of  the  measures  and  policy  of  that  institution.  It  assumes, 
1st.  That  inasmuch  as  they'are  always  in  demand  and  can  be  imported  and 
exported  at  a  very  small  expense,  the  quantity  of  precious  metals  which 
would,  in  ordinary  cases,  be  used  as  money  in  any  country  in  w^iich  the 
currency  consists  entirely  of  gold  and  silver,  would  be  limited  to  the  quan- 
tity which  may  be  required. to  preserve  their  value  at  the  same  level  in  it 
as  in  other-  countries.  2d.  That  the  effect  of  a  paper  currency,  convertible 
into  specie  in  case  of  an  over  issue,  will  be  to  reduce  the  value  of  gold  as 
much  as  if  the  excess  consisted  of  gold,  and  in  like  manner  to  cause'  au 
export  of  specie.  3d.  That  the  effect  of  a  paper  currency,  which  is  a  legal 
tender  and  not  convertible  into  specie,  would§be,  that  inasmuch  as  it  would. 
not -be  exported  to  other  countries  when  it  is  issued  in  excess,  nor  imported 
when  the  issues  are  unduly  limited,  its  value- may  vary  to  any  conceivable 
extent  from  its  value  in  other  countries ;  and  its  value,  as  compared  with 
commodities,  does  not  depend  upon  the  cost  of  producing  it  or^them,'  but 
upon  the  extent  to  which  it  has  been  issued  as  compared  with  the  demand. 
4th.  That  it  results  from  these  principles  that  convertibility  into  gold  and 
silver,  at  the  pleasure  of  the  holder,  is  not  necessary  to  give  value  to  paper 
money,  and  that,  if  perfect  security  could  be  obtained  that  the  power  of 
issuing  would  not  be  abused,  or  that  it  would  always  be  issued  in  such 
quantities  as  would  render  a  one  pound  note  uniformly  equivalent  to  the 
■■quantity  of  standard  gold  bullion  contained  in  a  sovereign,  the  precioi# 
metals  may  be  entirely  dispensed  with  as  a  medium  of  barter. 

The  Constitution  authorizes  Congress  to  "levy  and  collect  taxes,  duties*, 
imposts  and  excises  for -revenue  necessary  to  pay  the  debts,  provide  for  the 
common  defence,  and  ca,rry  on  the  Government  of  the  Confederate  States," 
"To  coin  money  and  regulate  the  value  thereof  and  of  foreign  coins/'  "  To 
regulate  commerce  with  foreign  nations,"  "  To  raise  and  support  armies," 
"  To  provide  and  maintain  a  navy,"  "  To  borrow,  money  on  the 'credit  of 
the  Confederate  States,"  and  to  pass  all  laws  which  may  be  necessary  and 
proper  to  carry  into  execution  any  of  the  foregoing  powers,  etc.  If  to 
make  Treasury  Certificates  a  legal  tender  be  necessary  and  proper,  as  'a 
means  of  carrying  on  the  Government  of  the  Confederate  States,  of  regu 
lating  the  value  of  money,  of  regulating  commerce  with  foreign  nations. 
ot  raising  ana  supporting  an  army,  of  providing  and  maintaining  a  navy, 
or  of  borrowing  money  on  the  credit  of  the  Government  of  the  Confederate 


;»1T' 
'oiei 
■to 

iff I 

pet: 


12      ■ 

States,  then  the  power  is  expressly  vested  in  Congress,  and  as  Congress  ha 
authorized  the  issue  of  paper  money,  it  is  the  incumbent  duty  of  Congres 
to  make  it  a  tender,  because  it  is  impossible  otherwise  to  restore  or  main^ 
tain  the  value  of  Treasury  Notes  or  Certificates  as  a  circulating  medium 
and,  as  Adam  Smith,"Ricardo,  McCulloch,  the  Edinburgh  Review,  the  Lok 
don  Quarterly,  Colwell,  Mr.  Calhoun,  and  all  other  reliable  writers  on  th 
Subject  of  currency,  agree*  that  if  there  is  a  perfect  security  that  the  powe 
of  issuing  paper  money  would  not  be  abused — that  is,  that  if  there  can  h{ 
perfect  security  that  it  will  be  so  limited  in  quantity  as  to  maintain  it; 
value  relatively  to  the  value  of  the  mass  of  circulating  commodities — not  o 
gold,  but  of  the  mass  of  circulating  commodities,  nearly  uniform,  then  th< 
precio.us  metals  may  be  entirely  discarded  from  circulation. 

It  is  this  principle  which  gives  value  to  the  notes  of  non  specie  banki  irei 
during  their  suspension — because,  inasmuch  as  the  public  owe  the  banks 
more  than  the  banks  owe  the  public,  and  the  debt  due  the  banks  must  \h 
paid,  in'  bank  notes  or  in  specie,  the  demand  for  bank  notes  for  this  usr 
maintains  their  value  as  a  medium  of  purchase  as  well  as  of  payment;  ana 
they  are  received  and  circulated  by  the  public  because,  although  they  maj 
not  be  a  tender  elsewhere,  they  are  a  tender  to  the  bank  of  issue,  and  a? 
the  suan  in  circulation  is  presumed  not  to  be  more  than  is  wanted  for  pay- 
ment to  the  banks,  that  fact  gives  them  credit  and  currency.  Now.,  I  will 
demonstrate  not  only  that  the  Congress  can,  by  a  judicious  system  of  fund- 
ing and  taxing,  as  I  propose,  so  limit  the  quantity  of  certificates  in  circula" 
tion,  as  to  make  them  uniform  and  stable  in  value,  as  currency,  but  that 
inasmuch  as  they  will  not  be  subject  to  the  contingencies  which  affect, the 
value  of  gold  in  the  foreign  market,  they  will  be  more  stable  in  value,  aud 
therefore  a  much  better  currency  than  gold. 

The  purpose  of  our  Constitution  was  to  enable  Congress  to  create  a  com 
rnon  and  uniform  circulating  medium  for  the*  people  of  the  Confederate 
States  If  it  be  true,  as  asserted  by  the  Review^  and  as  I  admit  it  to  be, 
that  specie  will  be  exported  when  the  price*  in  any  foreign  country  is  such 
as  to  pay  a  sufficient  premium,  and  that  it  will  return  when  the  value  b< 
■too  much  increased  that 'the  price  in  that  country  from  which  it  was  ex 
ported  is  so  much  greater  than  the  price  in  that  to  which  it  was  taken,  as 
to  pay  a  sufficient  premium;  then,  as  Congress  cannot  regulate  the  contin- 
gencies which  may  affect  the  value  of  gold  in  any  foreign  country,. and 
consequently  cannot  regulate  the  quantity  or  the  value  of  specie  in  aijy 
other  country,  it  is  manifest  that  Congress  cannot  regulate  the  value  of  a 
metallic  or  of  a  paper  currency  convertible  into  specie.  Inasmuch  as  Con- 
gress cannot  regulate  the  value  of  a  metallic  or  of  a  paper  currency  con- 
vertible into  specie,  and  can  regulate  the  value  of  a  fundable  paper  issued 
by  the  Government,  then  as  the  exclusive  power  to  coin  money  and  to  regu- 
late its  value  is  vested  in  Congress,  it  is  the  imperative  duty  of  Congress 
to  regulate  the  value  of  the  paper  money  which  they  have  authorized  to 
be  issued.  The  question  is  not  whether  Congress  shall  authorize  the  issue 
of  paper  money.  It  is,  will  Congress  regulate  the  value  of  the  paper  money 
which  they  have  already  issued,  and  is  its  being  a  tender  necessary  to  regu- 
late its  value  ? 


13 

1 1, "Can  Congress  discharge  their  duties  in  the. exigencies  in  which  we  are 
*iaced,,  without  the  use  of  the  public  credit,  as  money?  ••  If  Congress  is 

/impelled  to  use  the  public  credit  as  money,  who  can  deny  the  power  of 

^ongress  to  make  it  a  tender,  and  to  adopt  all  such  measures  as  are  neces- 
i.  j  iry  and  proper  to  regulate  its  value  ?     If  we  admit  that  ,the  value  ©f 

,i'oney,  whether  it  be  metallic  or  paper,  depends  upon  the  quantity  in  cir 
if  -■-'•■■■ 

i  i 


Nation,  and  that  it  is  a  fixed  law  of  a  metallic  and  a  convertible  paper 
Wreney  that  specie  will  be  exported  whenever  its  value  is  greater  in  any 


•jloreign  market,  and  that  it  is  a  fixed  law  of' paper  currency  not  convertible 

j  rito  gold,  that  if  the  quantity  in  circulation  be  no  more  than  is  requisite 
,,;jor  use  as  money,  it  will  be  of^equal  value*  as  gold,  and  that  the  precious 

j  aetals  in  such  case  may  be  dispensed  with,  then  it  follows  that  if  Congress 
aakes  the  paper,  which  they  issue,  a  tender,  and  reduces  the  quantity  in 
abtirculation  to  the  sum  required  for  use  as  money,  the  paper  thus  issued 
nljinay  be  made- as  stable  and  uniform  in  value  as  gold.  Can  Congress,  by  a 
judicious  system  of  taxing,  cause  the  excess  of  their  issues  -to  be  funded  ? 
ffi<fe[f  five  per  cent,  tax  will  not  suffice,  then  impose  a  tax  of  ten  per  cent.,  but 
wjaiy  earnest  belief  is  that  the  tax  proposed  will  be  sufficient. 
tjij  As  such  a  currency  will  not  be  subject  to  the  general  laws  which  resju- 
agitate  the  quantity  and  value  of  speck,  it  will  be  more  uniform  and  stable  in 
rvalue  than  gold.  For  it  is  admitted  that  if,  from  any  cause,  cold  is  more 
illl'valuable  in  England  than  elsewhere,  then  the  quantity  of  gold  in  England 
iliwill  be  so  increased  by  importation  from  abroad,  that  its  value  will  be-,  re 
ajiduced  to  the  same  level  as  it  may  be  in  the  foreign  countries  from  which 
tM  may  have  been  imported ;  then,  if  it  shall  appear  that  the  importation 
e.9iof  gold  will  necessarily  continue  long  after  the  requisite  supplv  of  specie 
[iihas  been  obtained,  and  that  the  inevitable  consequence  will  be  an  undue 

expansion  of  the  currency  to  be  followed  by  a  re  exportation  of  specie,  and, 
.^consequently,  by  an  undue  contraction  of  the  currency,  then  it  follows  that- 
(,,the  precious  metals,  being  thus  liable  to  be  increased  and  diminished  in 

quantity,  must  necessarily  fluctuate  so  much  in  value  that  it  is  impossible 
,'  to  predicate  upon  them  a  stable  and  uniform,  currency.  This  truth  is 
,  forcibly  illustrated  by  the  annexed  ,£able,  prepared  with  great  care  from 
.1  authentic  official  sources  : 


14 

'UV'iV  showing  the  rate,  of  interest  charged  hy  the  Bank  of  England  at  the  dates  givtn.  the  quanlitn 
of  bullion  in  the  Bank,  the  notes  in  circulation  and  the  notes  in  reserve,  with  a  statement  of  thr. 
loans  of  tile  Banks  of  the  City  of  New  York,  the  amount  of  their  notes  in  circulation,  and  of  thl 
specie  in  their  vaults,  given  in  millions,  omitting  the  small  fractions. 


BANK   OF   ENGLAND 

flanks  it»  tfosefty©?  Mew  York 

Rate  of 

Bullion 

Notes  in  !      Notes     ' 

Loans 

Specie 

Circula- 

DATE 

Interest 

in 

Circulation! 

ui 

in 

in 

tion  in 

pur  cent. 

Millions 

in  Millions!    Reserve  j 

Millions 

Millions' 

Millions- 

1*52.    Jan.  1 

t 

m 

$88 

i    '             ! 
$  96     !  $58* 

S    .... 

$..'. 

s... 

April  22 

2 

98 

roe 

574 

1853.    Jau.  6 

24- 

99 

117 

49     .-| 

Jan.  20 

3* 

97 

118 

m 

... 

June  2 

n 

91 

117 

11* 

Sept.  1 

4" 

82 

112 

38*  ■; 

92 

ii 

S 

Sept.  15 

4* 

*79 

112 

31* 

90 

ill 

9* 

Sept.  29 

5 

*78 

113 

BL       i 

90 

m 

9* 

1854.  Mayil 

H 

63 

105 

23*. 

90f 

m 

9^ 

Aug.'  o 

5 

66 

101 

31 

98  f    ■ 

•  .\ 

... 

1SJ55.  April  1 

4* 

75 

96 

*ty 

■  m 

15 

7^ 

May  3 

± 

78 

100 

53*    i 

93 

14* 

8 

June  14 

u 

90 

97 

59-* 

93 

15 

7* 

•  Sept.  6 

4 

7L 

101 

m'J 

100 

12 

71' 

Sept.  15 

4'$ 

68 

98 

37* 

99 

m 

7i  i 

Sept.  27 

5 

64 

101 

31 

97*. 

10 

7! 

Oct.  4 

5; 

60 

101 

102 

32* 

95* 

11 

71 

Oct.  18 

6-7 

55 

51* 

.  95 

12* 

7} 

1866.  May  2,2 

6 

51 

96 

19 *. 

102i 

13f 

8} 

May  29 

5 

56 

98 

51 

102* 

11 

81 

June  26 

4**' 

65 

98 

32 

107 

17 

81 

Oct.  17 

5 

51 

105 

31      : 

105 

101 

&l 

Oct.  26 

8-7 

51v 

103 

M*   j 

104 

10* 

Si 

Nov.  13 

7 

48 

.99        i 

15 

103* 

12I 

81 

'  Dec.  4 

6|     ' 

52 

96 

ior  i 

106  £ 

12i 

•8* 

Dec.  18 

-  6 

53 

93 

49i 

108* 

11 

8* 

1857.    Jan.  1 

■Q} 

45 

..' 

109 

11 

8* 

June  1 

• .. 

55 

... 

1 

•• 

115*. 

■  13 

8| 

Sept.  1 

5.- 

57 

US 

loj 

8* 

Oct.  1 

6*. 

50 

106 

HI 

8 

Oct.  20 

7  - 

47. 

... 

••       1 

97i 

n 

8 

Oct  30 

8 

45 

! 

95 

12| 

6* 

Nov.  15 

9 

40 

1 

96| 

16* 

6* 

Dec.  10 

10 

35 

.. . 

. .  ■ '! 

96*- 

26 

6*.  ■ 

Dec.  21 

. . . 

45 

••  '  I 

97* 

28 

6*. 

Dec.  31 

50 

•• 

98 

27*, 

6* 

1858.   Jan.  1 

60 

•••  .      * 

•• 

984. 

28* 

H 

••  Jlarck  1 

85 

.. 

105' 

32f 

61 

Aug:  1 

80 

120f 

•   35 1 

7| 

Oct.  1 

95 

.... 

..    1 

... 

■  ...•   ! 

... 

15 

It  will  b$  seen  that  the  average  of  specie  and  bullion  held  by  the  Bank 
of  England,  from  January  1,  1S52,  to  October  1,  1858,  was  about  sixty  - 
three  inillions»of  dollars.  If  we  assume  this  to  be  the  u  proper  level,"  then 
the  fluctuations  between  ninety  nine  and  thirty  five  millions  of  specie,  and 
the  various  fluctuations  between  two  per  cent,  and  ten'per  cenU  in  the  rate 
of  interest,  as  charged  by  the  Bank,  show  that  specie,  as  administered  by 
the  Bank  of  Eugknd,  instead  of  being  the  basis  of  a  stable  and  uniform, 
currency,  is  no  more  than  the  medium,  through  the  agency  of  which  a  few 
monied  men  are  enabled,  by  the  use  of  their  credit  ancrthe  organization  of 
the  Exchanges,  to  control  and  regulate  not  only  the  value  of  money,  but 
the  values  of  property — spreading  ruin  and  bankruptcy  broadcast  through- 
out the  world,  enriching  themselves  by  creating  those  fluctuations  in  the 
values  of  money  and  of  property,  which,  as  they  declare,  it  is  their  purpose 
to  prevent. 

It  should  be  remembered  that  it  was  the  wars  in  India  aud  China  which 
created  an  extraordinary  demand  for  specie  in  1857.     That  from  the  com- 
mencement of  the  war  in  the  Crimea  to  the  close  of  the  wa?'s  in  India  and 
'China,  the  export  of  specie  from  the  United   States  was  more  than  two 
I  hundred  and  eighty  millions  of  dollars.     That  the  average  bullion  in  the 
i banks  of  the  city  of  New  York,  from  1st  July,  1S52,  to  the  20th  October, 
1857',  was  $11., 774, 785,  and   that  Gibbon,  in  his  history  of  the  panic  and 
the  suspension  in  New  York  in  1857,  says  that  although  there  were  seven 
millions  of*  dollars  withdrawn  between  the  10th  and  17th  of  October,  the 
depletion  in  coin  was  but  $5,483,804,  and  yet  he  says  that  the  effect  of  the 
panid,  created  by  the  loss  of  this  sum  in  specie,  was  that :  "  The  regular 
discount  of  bills  by  the  banks  had  mostly  been  suspended,  and  the  street 
rates  for  money,  even  on  unquestionable  securities,  rose  to  three,  four,  and. 
even  five  per  cent,  a  month.      On  the  ordinary  securities  of  merchants,  such 
as  promissory  notes  and.  Bills  of  Exchange,  mo'ney  was  not  to  be  had  at  any 
rate.     House  after  house,  of  high  commercial  repute,  succumbed  to  the 
panic,  and  several  heavy  banking  firms  were  added  to  the -list  of  failures. 
*  Commercial  business  was  suspended  everywhere. 

The  avalanche  of  discredit  swept  down  merchants,  bankers,  monied  corpo- 
rations and  "manufacturing  companies,  without  distinction;  old  houses,  of 
accumulated  capital,  which  had  withstood  the  violence  of  all  former  panics, 
were  prostrated  in  a  day,  and  when  they  believed  themselves  to  be  perfectly 
safe  against  misfortune." 

He  gives  a  list  of  the  sales  at  the  broker's  board  of  bonds  and  stacks, 
which,  he  says,  includes  a  wide  range  of  securities,  from  the  best  down  to 
what  are  called  "  fancy,"  which  shows  an  average  depreciation  of  more 
than  one -third.  These  securities  represented  a  class  of  investments  exceed- 
ing one  thousand  millions- of  dollars,  the  depreciation  of  the  exchangeable 
value  of  which,  being  more  than  three  hundred  millions  of  dollars,  was 
caused  by  the  withdrawal  of  five  and  a  half  millions  of  dollars  from  the 
Banks  in  the  city  of  New  York.;  which  withdrawal  was  caused  by  the 
demand  for  specie  to  pay  the  expenses  of  the  war  in  the  Crimea,  in  India,, 
and  in  China.  Now,  if  the  United 'States  had  made  hef  disbursements  in 
certificates,  made  a  tender,  and  receivable  in  payment  of  taxes,  and  con,- 


16 

varlible  into  bonds  bearing  six  per  cent,  interest,  and  reconvertible  into 
certificates  which  were  a  legal  tender,  and  the  banks  had  held  twelve  mil- 
lions of  such  bonds,  instead  of  twelve  millions  of  specie,  there  would  have 
been  no  panic-— there  would  have  been  no  run  for  specie- — no  failure  of 
merchants,  bankers,  monied  corporations,  and  manufacturing  companies- 
there  would  have  been  no  depreciation  of  the  value  of  bonds  and  stdeks, 
and  no  loss  of  hundreds  and  hundreds  of  millions  of  dollars  in  the  ex- 
changeable values  of  property. 

Is  it  not  apparent  that  a  system  of  paper  money,  made  a  legal  tender, 
resting  upon  the  public  credit  as  a  basis,  and  regulated  by  a  judicious  sys- 
tem of  funding  and  taxation,  maybe  made  more  stable  and  uniform  in  value 
than  the  system  of  banking  and  currency  as  regula'ed  by  the  Bank  of 
England  ?  And  this,  I  affirm,  is  the  question  involving  no -less  our  interests 
*fid  welfare  than  the  question  of  our  political  independence.  We  have  no 
alternative— we  must  adopt  a  system  of  finance  which  can  be  regulated  by 
our  Congress,  or  the  values  of  our  credit,  of  our  currency,  and  of  our  pro- 
perty, will  be  regulated  by  the  Bank  of  England,  and  the  combination  of 
oionied  men  of  whom  that  bank  is  but  the  agent. 

In  -June,  1852,  the  Bank  of  England  held  more  than  one  hundred 
'millions  of  dollars  of  bullion  and  specie,  and  interest  was  but  2  per  cent , 
and  that  on  the.  10th  of  December,  1857,  this  sum  was  reduced  to  thirty. 
five  millions,  and  the  bank  interest  was  ten  per  cent. — the  effect  of  this 
pressure,  on  the  London  market,  was  that  by  the  1st  of  October,  ,1858,  the 
bullion  and  specie  in  the  bank  had  again  increased  to  ninety-five  millions, 
and  the  rate  of  interest  was  again  reduced.    „ 

The  power  of  the  Bank  of  England  over  the  currency  and  credit  of  all 
foreign  commercial  nations  is  forcibly  exhibited  by  the  ruinous  effect  upon 
the  credit  and  currency  of  the  city  of  New  York,  and  the  consequent  value 
of  propert)r.  The  average  of  specie  held  by  the  Banks  of  the  city  of  New 
York,  from  1st  September,  1853,  to  20th  October,  1857,  was,* say  eleven* 
and  a  half  millions  of  dollars;  the  pressure  by  the  screw  of  the  Bank  of 
England  reduced  this  quantity  to  $7,843,231,  and  interest  rose  .to  "three, 
four  and  five  per  cent,  a  month,".  "  on  unquestionable  securities,"  and  the 
exchangeable  value  of  property  depreciated  one  third.  But  the  tabic  before 
us  shows  that,  although  the  demand  for  specie  in  London  to  meet  the  dis- 
bursements of  the  wars  in  the  Crimea,  and  in-  India  and  China,  had  reduced 
the  bullion  and  specie  in  the  Bank  of  England  from  ninety  nine  millions, 
in  June, '1853,  to  thirty  five  millions  in  December,  1857,  and  had  reduced 
the  specie  in  the  Banks  of  New  York  from  seventeen  millions,  on  the  26th 
of  June,  1856,  to  $7,843,231  on  the  20th  October,  1857,  yet  the  effect  of 
the  pressure  by  the  Bank  of  England,  and  of  the  )*jfusal  of  the  Banks  of 
New  York  to  discount  the  best  commercial  paper,  was  to  cause  such  a  move- 
ment of  specie  that,  whilst  the  bullion  in  the  Bank  of  England  had,  on  the 
1st  of  October,  1858,  increased  from  thirty  five  millions  to  ninety-five 
millions,  the  specie  in  the  Banks  of  New  York  had,  on  the  8th  of  Mav, 
1858,  increased  from  $7,842,231  to  $35,453,146. 

Does  it  require  argument  to  prove  th;«t  this  fluctuation  in  the  quantity  of 
specie  held  by  the  Bank  of  England  and  the  baoks  of  New  York,  and  in 


the  rates  of  interest  charged  in  London  and  in  New  York,  was  the  conse- 
quence of  the  fact  that  the  currency  in  London  and  New  York  was  a  con- 
vertible paper,  predicated  on  a  specie  basis,  and  that,  by  refusing  to  renew 
discounted  commercial  paper  and  increasing  the  rate  of  interest,  the  de- 
mand for  specie  caused  it  to  flow  toward  London  and  New  York,  the  con- 
trolling commercial  centres,  until  the  accumulation  was  much  beyond  the 
sums  requisite  to  maintain  the  value  of  specie  at  the  " proper  level?" 
Thus  we  see  that  the  average  held  by  the  Bank  of  England  was  sixty-three 
millions,  and  that  the  average  of  the  banks  of  New  York  was  a  fraction 
more  than  eleven  millions,  yet  as  soon  as  the  banks  in  London  and  New 
York  applied  the  screw  with  sufiicieirt  force,  the  quantity  in  the  Bank  in 
London  rose  from  thirty-five  to  ninety-five  millions,  and  the  sum  in  the 
Banks  of  New  York  rose  from  less  than  eight  to  more  than  thirty  five  mil- 
lions. Thus,  the  tide  roseiu  London  more  than  fifty  per  cent.,  and  in  New 
York  to  more  than  three  hundred  per  cent,  above  the  "  proper  level ;"  and 
it  is  worthy  of  note  that  the  fluctuation  of  the  quantity  of  bank  notes,  in 
London  and  New  York,  was  much  less  under  this  severe,  pressure  of  the 
bank  screw  than  the  fluctuation  of  the  quantity  of  specie.  Thus  the  dimi- 
nution of  specie  in  the  Bank  of  England  was  sixty  four  millions,  whilst 
the  reduction  of  bank  notes  was  but  twenty  five  millions,  and  the  loss  of 
specie  by  the  New  York  banks  under  the  panic  was  $5,483,864,  whilst  the 
notes  in  circulation  were  reduced  but  one  million  and  a  half. 

Is  it  not  apparent,  from  these  facts,  that,  if  the  value  of  money  is  regu- 
lated by  its  quantity,  the  fluctuations  in  the  quantity  of  specie  being  greater 
than  the  fluctuations  in  the  quantity  of  bank  notes,  a  paper  currency,  made 
a  legal  tender  and  predicated  on  an  issue  of  public  credit,  and  regulated 
by  a  proper  system  of  funding  and  taxation,  will  be  more  stable  and  uniform 
in,  value  than  it  is  possible  for  a  metallic  or  convertible  paper  to  be  ?  Is  it 
not  apparent  that,  if  from  any  cause,  gold  is  so  much  more  valuable  in  Lon- 
don than  it  may  be  in  the  foreign  market,  that  the  Bank  of  England  finds 
it  necessary  to  so  increase  the  rate  of  interest,  and  so  reduce  the  discounted 
commercial  paper  as  to  cause  the 'precious  metals  to  flow  back  to  London,  the 
same  pressure  of  the  Bank  screw  which  forces  gold  to  flow  from  New  YoriJ 
to  London,  will  cause  it  to  flow  from  South  America,  from  Africa,  from 
India  and  China,  and  from  the  Mediterranean  and  Continental  Europe  to 
London?  ,  And  if  we  assume  that  sixty  three  millions  in  the  Bank  of 
England  indicates  the  proper  specie  level  for  England,  and  that  eleven  and 
a  half  millions  in  the  Banks  of  the  city  of  New  York  indicates  the  propor 
specie  level  for  the  United  States,  is  not  the  fact  that  immediately  after 
the  pressure  by  the  Bank  of  England,  in  December,  1857,  the  specie  in 
that  Bank  increased  from  thirty-five  millions  to  ninety-five  millions,  and 
that  it  also  increased  in  the  Banks  of  the  city  of  New  York  from  less  than 
eight  millions  to  more  than  thirty-five  millions,  conclusive  to  prove  that 
Congress  cannot  regulate  the  quantity  or  the  value  of  the  precious  metals; 
and  that  the  public  credit,  in  the  form  which  I  propose;  may  be  so  regu- 
lated as  to  create  a  currency  more  uniform  and  stable  in  value  than  gold  ? 

The  purpose  of  the  Constitution  is  to  establish   justice,  insure  domestic 
tranquility,  and  secure  the  blessings  of  liberty  to  ourselves  and  our  posterity. 
2 


IS 

Is  it  just  that  we  should  be  compelled  to  pay  a  debt  in  a  currency  worth,  to 
tbe  creditors,  twenty  times  the  sum  which  tliey  paid  for  it?     Take  the  case  of 
those  who  have  made  fabulous  millions  by  dealing  in  .foreign  merchandise 
purchased  with  the  public  credit  at  the  rate  of  twenty  dollars  of  Treasury 
Notes  for  one  of  gold.     Is  it  just  that  we  shall  be  compelled  to  pay  them  one 
hundred  and  twenty  per  cent,  per  annum  interest,  when  our  promise  is  to  pa/ 
them  but  six  per  cent.  ?     And  will  not  thepayment,  in  gold,  of  six  per  cent, 
interest  on  the  nominal  amount  of  the  debt,  be  equivalent  to  the  payment  of 
one  hundred  and  twenty  per  cent,  on  the  debt  created  ?     If  the  interest  is 
paid  in  a  currency  of  equal  value  to  that  in  which  the  debt  was  created,  will 
not  the   just  claims  of   the  public  creditor   be  discharged  i     If,  instead  of 
making  payment  in  the  same  medium  in  which  the  public  debt  was  contracted T 
we  are  compelled  to  pay  it  in  a  medium  worth  twenty  times  as  much,  will  we 
not  increase  the  public  debt  twenty  fold,  and  will  not  this  increase  the  burden 
of  the  debt  more  than  one  hundred  fold  \     Mr.  Calhoun  estimates  the  relative 
value  of  the  propert}',  as  compared  to  the  money  of  a  commercial  country,  to 
be  thirty  for  one.     If  we  assume  the  amount  of  our  public  debt  to  be  only 
two  thousand  millions  of  dollars,  contracted  in  a  medium  so  depreciated  that 
it  requires  twenty  paper  dollars  to  purchase  one  of  gold,  the  effect,  upon  the 
values  of  property,  of  paying  that  debt  in  gold  will  be  not  as. twenty  to  oner 
but  as  thirty  times  twenty  to  one — that  is,  not  only  to  increase  the  burden,  of 
our  debt,  payable  in  the  medium  in  which  it  was  created,  to  forty  thousand 
millions  of  dollars,  but  to  thirty  times  forty  thousand  millions  of  dollars — for 
whilst  it  will  "increase  the  value  of  the  medium  of  payment  twenty  fold,  It  will 
reduce  the  value  of  our  property  thirty  fold,  and  thus  it  will  consequently  in- 
crease the  burden  of  debt  and  taxation  in  the  same  relative  proportions,  for 
the  burden  of  the  debt  will  be  increased  in  the  same  proportion  as  the  ex- 
changeable value  of  our  labor  and  of  our  property  is  diminished.     If,  on  the 
other  hand,  we  make  payment'  in  tbe  same  medium  in  which  the  debt  was- 
contracted,   and  so  regulate  that  medium   as  to  increase   its    exchangeable 
value  nearly  or  quite  twenty  fold,  and  thus  maintain  the  exchangeable  value 
of  our  property,  and  at  the  same  time  that  we  diminish  the  burden  of  the 
public  debt,  relatively  increase  its  value  in   the  hands  of  the  public  creditor, 
the  hopes  of  calculating  avarice  may  be  disappointed,  but  who  can  deny  that 
the  fullest  claims  of  justice  will  be  satisfied  ? 

But,  under  the  Constitution,  Congress  have  power  to  regulate  "commerce 
with  foreign  nations,"  and  under  that  power  can  transfer  to  England,  and  to 
those  who  consume*Bi,itish  goods,  a  large  part  of  the  burden  of  our  public 
debt.  As  we  progress,  it  will  be  seen  that  England  is  chiefly  responsible  for 
the  war  in  which  we  are  now  engaged,  and  that'  strict  justice,  as  well  as  a 
wise  political  economy,  calls  for  the  measures  of  retaliation  which  it  is  in  our. 
power  to  inflict. 

In  the  Cotton  Planters1  Convention,  held  in  Macon  on  the  4th  July,  1861, 
I  suggested  the  propriety  of  the  purchase,  by  the  Confederate  Government,  ot 
the  entire  Cotton  crop,  as  a  means  of  sustaining  the  credit  of  the  Government 
and  providing  funds  for  prosecuting  the  war.  It  was  in  reply  to  my  personal 
argument,  urging  the  propriety  and  necessity  of  this  measure,  that  Mr.  Mem- 
minger  issued  his  remarkable  letter,  intended  to  act  on  the  business  conven- 


19 

tion  held  in  Macon,  in  October,  1861,  in  winch  he  denied  the  power  of  Con- 
gress to  authorize  the  purchase  of  Cotton  ! !  There  are  none,  now,  so  blind 
as  not  to  see  the  propriety  of  my  suggestion,  and  the  culpable  ignorance,  to 
call  it  by  no  harsher  name,  of  the  Secretary  of  the  Treasury.  Cutton  is  now 
worth,  in  Liverpool,  from  fifty  six  to  sixty  cents  per  pound.  The 
present  high  price  is  the  result  of  a  deficient  supply,  and  the  impos- 
sibility of  obtaining  it  elsewhere  than  from  the  Confederate  States. 
If  the  market  is-  thrown  open,  the  competition  will  soon  reduce 
the  price  to  less  than  one  third  the  sum  which  the  Government  could  realise 
if  Congress  were  to  authorize  the  purchase  and  hold  it  for  an  arbitrary 
price.  The  monopoly  of  tobacco  by  France  and  the  high  duties  levied  by 
England  illustrates  the  effect.  If  we  assume  that  the  average  cotton  crops 
for  the  next  ten  years  after  peace  will  be  but  four  millions  of  bales,  of  five 
hundred  pounds  each,  and  the  whole  is  purchased  at  a  price  which  will  enable 
the  Government  to  pay  the  producers  twice  the  sum  which  they  could  other- 
wise obtain,  and  yet  leave  a  margin  of  profit,  as  great  or  greater  than  the 
price  paid  the  producers,  it  is  obvious  that  the  monopoly  by  the  Government 
would  not  only  greatly  benefit  the  producer,  but  place  in  the  public  Treasury 
ample  specie  funds  to  sustain  the  public  credit  so  as  to  render  the  Treasury 
Certificates  equal  to  gold.  Say  that  the  Government  price  to  the  producer 
was  fixed  at  thirty  cents  per  pound,  and  to  the  consumer  at  sixty ;  this,  upon 
the  four  millions  of  bales,  would  give  six  hundred  millions  of  dollars  per  an- 
num to  the  producers  and  a  like  sum  to  the  Government.  If  to  this  be  added 
the  like  profits  on  our  tobacco  and  naval  stores,  it  will  be  seen  that  a  wise 
administration  of  our  finances  will  en'able  us  to  pay  our  public  debt  and  main- 
tain the  value  of  our  currency.  If  the  producer  is  unwilling  to  sell,  and 
prefers  ,a  foreign  market,  then  let '  the  export  duty  be  such  as  to  protect 
the  value  of  that  purchased  by  the  Government,  and  secure  the  profits  on  the 
Government  monopoly. 


CAN   CONGRESS    MAKE   TREASURY  CERTIFICATES  A  TENDER  5 

I  am  aware  that  it  is  believed  by  some  that  Congress  cannot,  make  Treasurv 
Certificates  a  legal_  tender,  alleging  that  the  effect  will  be  to  impair  the  obli- 
gation of  contracts.  The  Federal  Constitution  provides  that  Congress  shall 
pass  no  law  impairing  the  obligation  of  contracts,  and  yet  under  the  power  to 
enact  a  bankrupt  law,  the  old  Congress  released  bankrupt  debtors  from  the 
obligation  to  pay  their  debts.  Our  Constitution  provides  that  "ho  law  of 
Congress  shall  discharge  any  debt  contracted  before  the  passage  of  the  same.'' 
To  authorize  payments  in  the  certificates  which  Congress  have  issued  and  paid 
out  as  money,  will  not  be  to  discharge  the  debt  without  payment.  As  prop- 
erly remarked  by  Mr.  Calhoun,  the  meaning  and  purpose  of  the  Constitution 
are  explained  by  reference  to  the  history  of  the  times  and  the  circumstance* 
connected  with  its  adoption.  Ours,  with  the  exception  of  a  few  modifications, 
is  a  transcript  of  the  Federal  Constitution — that  part  which  gives  to  Congress 
power  to  coin  money  and  to  regulate  its  value  is  a  literal  copy.     We,  there- 


20 

fore,  recur  to  the  purpose  of  granting  these  powers,  and  fiad.  that  it  was  "  to 
secure  to  the  States  a  safe,  uniform  and  stable  currency,"  and  that  it  was  given 
to  Congress,  because,  if  each  State  were  permitted  to  coin  money  and  regulate 
its  value,  aud  to  make  the  money  coined  by  them  a  legal  tender,  there  would 
be  no  guarantee  that  each  would^not  coin  money  for  itself,  and  that,  instead  of' 
having  a  money  common  to  all  the  States,  and  of  equal  value  in  all,  the  value . 
of  the  money  of  the -several  States  would  not  be  as  various  as  the  coinage  and 
regulations  of  each  might  vary  from  the  coinage  and  regulations  of  the  other 
States.  Thus  the  money  of  account  of  England  is  pounds  and  shillings ;  of 
France,  livres  and  francs;  of  Germany,  the  Rix  dollar;  of  Russia,  the  ruble, 
aud  of  Spain,  the  dollar.  As  all  contracts  are  made,  and  books  and  accounts 
are  kept  in  the  money  of  account,  the  necessity  of  having,  for  a  people  living 
under  a  common  government,  one  common  money  of  account,  is  obvious ; 
and  hence  the  necessity  of  vesting  the  power  of  coinage  and  regulating  the 
value  of  money  in  Congress.  If  an  Englishman,  a  Frenchman,  a  German,  an 
American,  and  a  Russian,  were  each,  in  his  own  money  of  account,  to  offer  to 
purchase  the  same  property,  one  offering  to  pay  in  sovereigns,  another  in 
livres,  another  in  Rix  dollars,  another  in  rubles,  and  the  other  in  American 
dollars,  scarce  one  man  in  a  million  could  estimate  the  relative  value  of  the 
several  offers,  because  all  men  are  accustomed  to  the  money  of  account  of  that 
country  in  which  they  live,  and  in  which  their  transactions  are  made,  and  few, 
very  few  are  sufficiently  familiar  with  the  money  of  account  of  other  countries 
to  use  it  in  the  purchase  or  sale  of  commo'dities  without-  an  estimate  of  "its 
value  in  Jbeir  own  money  of  account.  Thus,  as  the  Spanish  dollar  was  cur- 
•  rent  in  the  States,  and  was  worth  in  the  money  of  account  of  New  York  eight 
shillings,  whilst  it  was  worth  in*the  money  of  account  of  Virginia  but  six,  if 
a  citizen  of  New  York  were  to  offer  thirty  shillings  per  barrel  for  fiour,  the 
Virginian  would  inquire  what  shilling  was  meant  ?  the  shilling  of  New  York 
or  of  Virginia  ?  Was  the  offer  at  the  rate  of  eight  or  six  shillings  to  the  dol- 
lar ?  As  I  have  before  remarked,  it  was  not  the  purpose  of  our  Constitution 
to  restrict  our  Congress  to  the  coinage  of  gold  or  silver.  It  was  not  to  pre- 
vent the  use  of  paper  money,  for  inasmuch  as  it  did  forbid  the  States,  and  did 
not  forbid  Congress,  to  make  paper  money  a  legal  tender,  and  gave  to  Con- 
gress an  unlimited  control  over  the  coinage  and  the  value  of  money,  it  is  con- 
clusively apparent  that  the  subject  of  paper  money  was  under  the  consideration 
of  the  Convention,  and  that  Congress  may,  in  their  discretion,  coiu  paper 
,  money.  To  me,  it  is  an  unanswerable  argument  in  favor  of  the  exercise  of 
this  power  by  Congress,  that  the  purpose  of  the  Constitution  being  to  create, 
for  the  people  of  the  Confederate  States,  a  safe,  uniform  and  stable  currency, 
Congress  can  so  regulate  the  value  of  paper  money  not  convertible  into  specie, 
as  to  make  it  safe,  uniform  and  stable  in  value,  and  cannot  so  regulate  the 
value  of  a  metallic  or  of  a  paper  currency  convertible  ifito  specie.  It  is  gen- 
erally assumed  and  admitted  that  the  value  of  the  precious  metals,  as  well  as 
of  paper  money,  depends  upon  the  quantity  in  circulation.  I  hold  that  this 
principle  is  modified  by  the  circumstances  under  which  they  are  used,  and 
that  their  value,  and  the  quantity  requisite  to  maintain  their  relative  value  as 
compared  with  other  commodities,  depends  upon  the  regulations  which  con- 
trol domestic  and  foreign  commerce. 


21  * 

Experience  fully  proves  that  the  value,  in  the  foreign  market,  of  cotton, 
rice,  sugar,  naval  stores  and  tobacco,  does,  not  depend  upon  the  cost  of  pro- 
duction in  the  home  market,  but  that  it  does  depend  upon  the  circumstances 
under  which  they  are  sold  in  the  foreign  market. 

We. have  seen  that  the  Constitution  took  from  the  States  the  power  to  coin 
money  and  regulate  its  value,  and  gave  it  to  Congress  because  the  purpose 
was  to  create  a  common  currency,  of  uniform  value  in  all  the  States,  and  ex- 
perience had  proved  that  it  was  necessary  to  deprive  the  States  of  the  power 
to  coin  money  and  to  regulate  its  value,  and  vest  it  in  Congress  as  the  common 
agent  of  all  the  States,  as  the  only  means  of  preventing  that  confusion  and 
diversity  of  the  money  of  account  and  depreciation  of  the  value  of  the  cur- 
rency, which  had  been  the  result  of  the  control  over  the  coinage  and  the 
currency  theretofore  vested  in  each  of  the  several  States.  We  have  also  seen 
that  the  power  which  the  Bank  of  England  can  exert  over  the  currency  of  all 
other  countries,  which  is  predicated  on  a  specie  basis,  is  such,  that,  by  refusing 
to  renew  the  discount  of  commercial  paper,  and  increasing  the  value  of  money 
in  London,  by  increasing  the  rate  of  interest,  that  ;bank  can  compel  the  banks 
in  the  United  States  to  suspend  specie  payments,  as  was  the  case  in  185*7, 
when  but  for  the  demand  in  London  for  specie  to  pay  the  expenditures  of  the 
wars  in  the  Crimea,  and  in  India  and  China,  there  would  have  been  no  press- 
ure upon  our  banks,  and  no  depreciation  in  the  exchangeable  values  of  our 
property  ;  whereas,  the  actual  depreciation  was  from  thirty  to  fifty  per  cent,  or 
more.  Is  it  wise,  or  can  any  one  believe  that  it  was  the  purpose  of  the  Con- 
stitution to  "vest  in  the  Bank  of  England  that  power  over  our  currency  of 
which  it  was  the  purpose  to  deprive  the  States  ?  What  is  the  Bank  of  Eng- 
land, and  what  are  the  motives,  and  wAo  are  the  persons,  and  what  are  the 
interests  that  regulate  its  measures  and  policy,  that  we  should  give  to  that 
Bank  a  control  over  the  values  of  our  currency,  and  i>f  our  credit  and  pro- 
perty, of  which  we  have  deprived  the  Legislatures  of  our  own  several  States? 
Are  not  the  directors  and  managers  of  that  Bank  English  merchants,  whose 
duty  it  is  to  exert  the  powers  and  influence  which  they  possess  for  the  advance- 
ment of  British  interests  ? 

THE     BANK    OF    ENGLAND. 

It  is  proper  that,  at  this  point,  we  should  pause  and  inquire,  what  have 

BEEN     THE     MOTIVES    WHICH     HAVE     REGULATED    THE     MEASURES    AND    POLICY 

of  the  Bank  of  England  ?  And  wtiat  has  been  the  effect  of  the  financial 
management  of  that  Bank?  It  originated  in  a  loan  at  eight  per  cent,  of  six 
millions  of  dollars  to  the  Government,  and  became  the  agent  of  the  Govern- 
ment in  the  collection  and  disbursement  of  the  public  revenue.  Besides  the. 
eight  per  cent,  as  interest  on  the  sum  advanced,  the  Bank  received  $20,000  a 
year  as  the  expense  of  management. 

The  capital  is  now  $72,765,000,  all  of  which  is  lent  to  the  Government  at  a 
rate  of  about  three  per  cent,  per  annum,  and  yet  it  pays  a  dividend  of  seven 
per  cent.!  Its  notes  are  a  legal  tender,  except  at  its  own.  counter,  and  it  is 
the  only  joint  stock  bank  which  can  issue  notes  in,  or  within  sixty-five  miles 
of  it,  or  can  draw  or  accept  bills  of  exchange  on  Lcmdon.  It  receives  the 
public  revenues,,  and  holds  the  deposits' of  the  various  public  offices — being 
not  less  than  $20,000,000.     For  discharging  these  duties  and   registering 


22 


transfers  and  paying  the  dividends  on  the  public  debt,  it  now-  receives 
$640,000.  It  is  a  close,  corporation,  managed  by  twenty-four  directors, 
icho  furnish  no  accounts  to  the  proprietors.  Eight  go  out  every  year  and 
eight  come  in.  •  When  the  period  ot  election  draws  near,  the  directors  make 
out  what  is  termed  a  house  list,  giving  the  names  of  those  whom  they  wish 
to  have  as  colleagues,  and  this  list  is  uniformly  elected.  This  hody  is  absolute 
in  the  extreme,  and  perfectly  free  to  act  as  it  sees  ft  under  all  circumstances. 
It  is  led  by  no  authority  and  restrained  by  no  responsibility. 

The  following  table,  carefully  prepared  from  the  official  data,  shows  the 
•amount  of  Exchequer  bills  and  public  deposits  held  by  the  Bank  of  England, 
the  bank  notes  Jn  circulation,  the  commercial  bills  discounted  by  the  bank, 
and  the  actual  taxation  from  1808  to  1831 : 


Exchequer  Bills 

Publie  Deposit 

Circulation 

Bills  Discount*  d 

Actual  Taxation 

1808 

$74,781,970 

$58,807,240 

$85,556,450 

$64,750,500 

$310,733,605 

1809 

76,538,865 

55,468,240 

97,870,900 

77,377,500 

349,399,410 

1810 

85,983,385 

59,750,'233 

123,909,950 

100,353,000 

339,127,985 

1811 

109,421,240 

50,959,270 

116,534,250 

71,777,000 

326,355,500 

1812 

105,825,950 

51,950,650 

115,134,400 

71,458,000 

323,760,625 

1813 

'  127,956,800 

51,967,020 

124,140,600 

61,651,000 

241,514,300 

1814 

174,912,425 

60,791,135 

341,141,450 

66,429,000 

351,201,765 

1815 

130,970,430 

58,687,180 

136,243,350 

74,735,50ft 

355,015,710' 

1816 

130,487,155 

54,038,300 

43,49.y;."> 

133,793,600 

57,082,000 

313,203,355 

1817 

135,491,190 

■  147,718,900 

19,803,000 

260,678,745' 

1818 

136,285,060 

35,334,435 

131.010,750 

21,826,000 

269,836,090 

1819 

.  127,095,740 

22,684,865 

126,263,420 

32,575,000 

250,455,540 

1820 

95.869,985 

18,567,210 

•  121,496,700 

19,418,000 

275,319,465 

1821 

78,764,765 

19,600,785 

111,476,500 

13,383,500 

277,650,365 

1822 

68,344,795 

20,539,265 

87,328,950' 

16,833,500 

226,278,072 

1823 

59,313,385 

"  27,633,175 

96,156,200 

15,619,000 

272,234,845 

1824 

73.245,935 

36,110,835 

100,660,600 

19,849,000 

277,282,375 

1825 

87,072,830 

20,786,570 

96,994,200 

24,607,500 

268,857,500 

•  1826 

87.569,405 

21,071,355 

107.817,800 

24,541,500 

156,574,650 

1827 

99,^)47,975 

21,119,335 

'213,788,000 

6,222,000 

256,558,585 

1828 

•103,413*880 

19^108,485 

106,787,550 

5,317,000 

263,715,950 

1829 

100,362,200 

19.313,280 

97,780,900 

11,253,500 

251,188,915 

1830 

104,558,080 

23,809,760 

107,223,500 

4,599,500 

258,541,925 

1831 

92,282,760 

19,700,510 

92,638,150 

7,668,000 

233,097,870 

$2,451,493,265 

£877,252,000 

$2^720,183,100 

$881,449,500 

$7,330,022,260 

PUBLIC  CREDIT  BETTER  THAN  THE  NOTES  OF  THE  BANK. 

* 

By  reference  to  .Mr.  Calhoun's  speeches,  as  quoted,  it  will  be  seen  that 
■  North  Carolina  maintained  for  y^urs  a  circulation  of  irredeemable  paper 
money  of  four  times  the  sum  of  the  annual  taxation,  whifh  did  not  depre- 
ciate, although  it  was  not  a  legal  tender ;  the  value  -being  maintained  by  the 
fact  that  it  was  receivable  at  par  with  gold  in  the  payment  of  taxes.;  and 
also,  that  Russia,  upon  a  current  revenue  of  ninety  millions  of  dollars,  sus- 
tained, at  par  with  gfikl,  a  ci  rrent  circulation  of  irredeemable  paper  of  one- 
hundred  and  twenty  millions  of  dollars.     Is  it  not  apparent  that,  if  instead 


23 

of 'borrowing  the  credit  of  the  Bank,  the  Government  of  England  had  issued 
its  certificates,  receivable  in  the  payment  of  taxes  and  fundable  at  a  proper 
rate  of  interest,  the  value  of  the  public  credit  would  have  been  equal  to  the 
value  of  the  notes  of  the  Bank  of  England  ?  The  table  shows  that  the  an- 
nual average  of  the  Exchequer  bills  held  by  the  BaDk,  -and  upon  which  Gov- 
ernment paid   interest,  was $102,145,552 

and  the  average  public  deposits  was —     35,552,166 

and  the  average  sum  of  taxes  was 305,446,758 

making  a  fund  of $444,144,476 

placed  by  the  Government  with  the  Bank  as  its  agent,  and  which  sum  was 
used  by  the  Bank  as  the  basis  of  its  issues.  *tf  the  Government  had  applied 
these  resources  to  sustain  its  own  credit,  and  that  cedit  had  been  made  a 
legal  tender,  instead  of  making  the  notes  of  the  Bank  a  tender,  inasmuch  as 
the  public  credit  of  England  would  not  have  been  subject  to  the  laws  which 
regulate  the  export  and  import  of  sppcie,  the  quantity  of  the  public  credit,  in 
circulation,  could  have  been  regulated  by  Parliament,  and  the  value  of  the 
currency  would  have  been  much  more  uniform  and  stable  than  it  has  been 
under  the  regulations  of  the  Bank.  Is  it  not  also  apparent  that,  in  that  case, 
there  would  have  been  no  such  fluctuations  in  the  quantity  and  values  of 
money  and  of  credit;  no  such  suspensions  of  banks;  no  such  depreciations 
in  the  values  of  property  and  of  labor  ;  and  no  such  individual  distress  and 
bankruptcies  as  the  management  of  that  Bank  has  caused,  not  only  in  Eng- 
land, but  throughout  the  commercial  world? 

Why  did.  the  Government  pay  interest  oh  the  Exchequer  Bills  ?  Was  it 
•not  because  these  bills,  instead  of  being  a  tender,  represented  the  unfunded 
debt,  and  the, payment  of -interest  was  necessary  to  make  them  of  equal  value 
as  bank  notes,  which  were  a  tender?  ^If  so,  by  making  the  public  credit, 
issued  as  certificates,  receivable  in  payment  of  taxes,  a  tender  (that  is,  con- 
verting them  into  money),  the  payment  of  interest  would  no  longer  be  re- 
quisite to  maintain  the  value  of  so  much  as  was  requisite  for  use  as"  money  ? 
And  who,  with  our  own  experience,  will  deny  that  Parliament  could,  by  a 
judicious  system  of  taxing  the  unfunded  certificates,  cause^ajl  to  be  funded, 
except  the  sum  requ  site  for  use  as  money  ?  Is  it  not  further  apparent  that 
^uch  a  use  of  the  public  credit  would  save  to  the  people  and  the  Government 
the  whole  of  the  interest  on  the  sum  used  as  currency  ?  If  we  assume  that 
the  sum  thus  used  would  be  no  more  than  the  annual  taxes,  as  this  average, 
as  given  in  the  table,  was  $305,446,758,  the  interest  upon  that  sum,  at  three 
per  cent,  only,  would  be  an  annuity  of  $9,163,402.74,  which,  if  com- 
pounded at  three  per  cent.,  would  create  a  sinking  fund  which  would  sooU 
absorb  the  whole  public  debt  of  England  !  This,  however,  is  apart  from  the 
ruinous  effect  which  the  management  of  the  Bank  has  had,  and  will  have, 
upon  individual  credit  and  upon  the  progress  of  individual  industry  and  the 
general  prosperity  of. this  country-. 

That  England  herself  is  not  satisfied  with  that  system  appears  in  the  fact 
stated  by  Hardcastle,  in  his  treatise  upon  Banks  and  Bankers,  that  the  bare 
titles  of  the  acts  .of  Parliament  passed  upon  the  subject  of  the  affairs  of  the 
bank  "  occupy  more  than  200  pages  of  the  index  of  the  statutes  at  large." 


24 

Surely  there  must  be  some  defect  in  a  system  which  requires  so  much  tin- 
kering— and  I,  for  one,  am  unwilling  that  the  tinkers  who  have  so  botched 
their  own  system  shall  be  permitted  to  regulate  ours.  And  that  is  the  very 
danger  which  threatens  us.  •  m ' 

Let  me  be  distinctly  understood.  I  do  not  complain  of  or  censune'the 
bank  as  a  bank.  It  is  not  the  bank,  but  the  system  as  regulated  by  Parlia- 
ment, and  those  who  manage  the  bank  under  that  system,  which  I-believe 
rests  upon  three  fundamental  errors. 

1st.  That  the  paper  circulation  should  at  no  time  exceed  the  value  of  the 
gold  and  silver  of  which  it  supplies  the  place. 

2d:  That  the  paper  circulation  should  depend  upon  the  quantity  of  the 
bullion  in  the  Bank  and  be  regelated  by  the  foreign  Exchange. 

3d.  That  whenever  there  is  a  foreign  demand  for  gold,  the  Bank,  by  refus- 
ing to  discount  commercial  paper,  and  the  sale  of  Exchequer  bills,  shall 
diminish  the  quantity  of  bank  paper  in  circulation  and  so  increase  the  de- 
mand for- gold,  as  a  means  of  payment,  as  to  render  gold  of  more  value  in 
England  than  it  may  be  in  the  country  to  which  it  may  have  gone,  and  thus 
coerce  its  reflux  to  the  Bank. 

These,  we  believe,  are  fundamental  principles  in  the  management  of  the 
Bank,  and  we  believe  them  to  be  fundamental  errors,  as  the  history  of  the 
Bank  and  of  the  worlfl,  so  far  as  the  world  has  been  under  the  influence  of  the 
bank,  demonstrates.  This  error  is  the  more  striking,  when  we  take  into  con- 
sideration the  causes  which  induce  the  export  of  gold.  In  case  of  wars,  gold 
may  be  in  greater^ demand  elsewhere,  and  being  at  a  premium,  will  be  sent 
abroad.  In  case  of  foreign  loans,  a  premium  will  be  given  which  w\\\  cause 
it  to  be  exported.  In  case  of  bad  harvests,  foreign  wheat  must-  be  paid  for 
in  gold.  In  all  such  cases  the. bank  refuses  to  renew  discounts.  If  this  does 
not  produce  a  sufficient  pressure,  then  she  goes'  into  the  market,  sells  Ex- 
chequer bills  in  exchange  for  bank  •■notes,  and  thus  renders  the  demand  for 
gold  so  severe  as  to  compel  the  reflux.  That  some  idea  may  be  formed  of 
the  effect  of  this  turning  of  the  bank  screw,  I  quote  from  Hardcastle.  He 
says : 

Our  banking  system  is  bad  in  the  extreme  ;  it  has  been  everything  by  turns,  but  what 
it  ought  to  be,  and  gotbing  long.     It  is  not  only  bad  itself,  but  it  communicates  evil  to 
everything  around  it.    It  is  an  epidemic  that  arrests  and  affects  all  classes ;  a  plague 
that  corrupts  and  kills  high  and  low,  poor  and  affluent,  without  distinction — a  thousand 
incidents  have  taken  place  in  this  city  within  a  year  [London  in  1842]  which  exhibit 
our  monetary  affairs  in  a  most  deplorable  condition.      .....      I  have  seen,  last 

spring,  a  bill  broker  go  from  house  to  house,  of  an  afternoon,  with  the  bills  of  a  country 
bank,  accepted  by  first  rate  firms  in  Lombard  street,  and  cash  could  not  be  got  for  them 
at  five  per  cent,  interest  and  one  and  a  half  per  cent,  commission,,  I  have  known,  about 
the  same  time,  a  man  with  £10,000  Exchequer  bills,  unable  to  raise  £4,00o  upon  thun 
at  his  banker's,  and  that  bank  one  of  the  best  in  Lombard  street.  I  have  known  a  ci'y 
banker,  at  the  beginning  ol  last  year,  confess,  in  a  mixed  company,  that  he  would  be 
glad  to  allow  ten  per  cent,  for  money  for  six  months  to  come.  At  the  same  time,  I  have 
known  another  banker  in  Lombard  street  pay  eight  per  cent,  for  an  advance  of  money, 
on  Exchequer  bills ;  and  ten  per  cent,  to  be  charged  on  the  discount  of  a  bill  of  Ex- 
change, the  acceptor  of  which  was  then,  and  still  is,  a  Bank  Director.  These  are  facts 
that  tell  the  true  story  of  our  banking  system — these  are  realities  that  prove  our  dis- 
tress  While  they  last,  credit  is  prostrate,  labor  fails  of  its  market,  and 

property  almost  ceases  to  be  wealth.  ......     Our  currency  .has  resembled  the 

shifting  sands  that  impede  the  navigation  of  some  of  our  most  capacious  harbors,  and 


25 

defy  the  skill  of  the  most  experienced  mariners.  We  have  been  dealing  -frith  a  series 
of  experiments,  and  each  succeeding  writer  has  distinguished  himself  by  showing  where 

and  how  it  was  that  the  last  experiment  had  proved »a  particular  failure 

The  Bank  of  England  had  the  complete  control  and  absolute  management  of  the  finances 
of  the  whole  country,  and  the  losses  which  the  country  has  now,  for  fifty  years  or  so, 
sustained  by  repeated  abuses  of  that  currency  in  the  hands  of  the  Bank,  have  been  in- 
calculable ;  so  wild  and  extravagant  have  been  the  alternate  expansions  and  contrac- 
tions ;  so  suddenly  and  capriciously  have  the  value  of  money  and  prices  been  jerked  up 
and  tossed  down,  that  it  is  not  unreasonable  to  compare  the  Bank  Directors  to  a  set  of 
awkward  showmen  at  a  fair,  with  the  trading  interests  of  the  nation  in  a  great  ill-con- 
trived swing-swong,  which  at  one  moment  they  fling  up  high  in  the  sky,  and  at  another 

bring  down  so  low  as  to  drag  the  ground  and  rake  the  gutters  with  it 

The  habit  of  tampering  with  the  currency  was  contracted  by  these  gentlemen  at  an 
earljr  period.     We  can  trace  it  distinctly  as  far  back  as  1782,  and  find  it  persevered  in 
up  to  1839,  invariably  with  the  same  pernicious  results.    ...     .     .     A  heavy  panic, 

fraught  with  great  commercial  distress,  ran  through  the  years  1*783  and  1784,  which  has 
been  brought  home  to  the  Bank  by  more  than  one  conclusive  witness. 

In  1814,  the  Dutch  ports  were  opened,  the  harvest  was  deficient;    and 

that  most  searching  of  the  calamities,  to  which  our  artificial  condition  is  exposed,  no 
sooner  visited  the  land,  than  the  importation  of  foreign  corn  occasioned  a  great  decline 
in  the  price  of  this  principal  article  or'  agricultural  produce,  which  gradually  extended 
to  the  price  of  commodities  generally  Unprecedented  suffering  now  took  place;  the 
storm  swept  the  country  through,  and  raged  with  increasing  violence  until  1819,  by 
which  time  the  agricultural  and  banking  interests  generally  were  reduced  to  the  lowest 
pitch  of  distress.  Farmers  were  insolvent  everywhere  ;  mercantile  firms  became  bank- 
rupt by  thousands  and  levelled  their  connexions  indiscriminately  in  the  dust ;  whilst  as 
to  the  bankers,  between  those  who  either  partially  suspended  business  or  wholly  broke,  in 

the  years  1815  or  1816,  there  was  a  diminution  of  no  less  than  240  firms 

fn  noticing  the  moving  causes  of  the  calamities  of  1816,  we  should  bear  in  mind  that 
the  cessation  of  hostilities  on  the  continent  was  an  established  condition  of  the  long 
promised  resumption  of  cash  payments.  Much  of  the  panic  then  existing  is  referable 
to  a  proposal  for  carrying  that  measure  into  effect,  in  1818. 

The  Bank  made  some  preparations  for  the  change  by  a  partial  contraction  of  its  is- 
sues. But  the  depression  of  all  the  leading  interests  of  the  country  was  too  intense, 
and  the  notion  was  quickly  abandoned. 

He  quotes  Mr.  Atwood,  in  1818,  as  saying: 

In  the  midst  of  this  fall  of  prices,  what  operation  in  business  could  proceed  without 
loss  or, ruin?  There  has  been  no  firm  in  which  the  capital  of  the  merchant,  none  in 
which  the  capital  of  the  manufacturer,  could  be  invested  without  the  half  of  it  being 
sacrificed  during  this  calamitous  period.  We  have  been  thrown  back  upon  a  condition 
of  events  in  which  all  industry  and  enterprize  have  been  rendered  pernicious  or  ruinous, 
and  where  no  property  has  been  safe,  unless  hoarded  in  the  shape  of  money,  or  lent  to 
others  on  double  security. 

He  quotes  further  from  Mr.  Atwood's  evidence  before  a  committee : 
The  reward  of  labor  being  destroyed,  the  laborers,  who  can  each  produce  four  times 
as  much  of  the  comforts  of  life  as  they  and  their  families  could  possibly  consume,  are 
starving  while  superabundance  reigns  around  them.  They  find  no  employment,  because 
the  organ  of  industry,  which  is  money,  does  not  exist  in  sufficient  quantities  to  give 
productive  classes  a  reward  for  their  exertions.  The  peasant  idly  wanders  about,  and 
looks  over  the  hedge  of  the  uncultivated  farm,  where  the  land  is  suffering  for  want  of 
his  labor,  but  at  the  same  time  the  farmer  has  neither  the  profit  nor  the  labor  to  bring 
the  land  into  cultivation. 

Speaking  of  the  crisis  in  1836,  Hardcastle  says: 

Of  the  bankruptcies  that  then  took  place,  and  of  the  extreme  depression  of  our  manu- 
factures and  commerce,  it  would  be  impossible  to  give  any  exact  account.  Prices  fell 
forty  per  cent.  In  the  manufacturing  districts  there  was  no.  employment  for  the  work- 
men; merchants  stopped  payment  in  numbers,  not  because  they  were  insolvent  and  had 


26 

no  property,  but  because  no  market  was  to  be  had  for  their  goods,  no  discount  for  their 
bills,  no  advance  upon  their  stocks.  It  was  a  rare  and  melancholy  sight  to  behold  Eng- 
lish merchants  going  through  the  Gazette  in  numbers,  while  their  warehouses  were  full 
of  commodities,  and  their  characters  unimpeached  for  knowledge  of  business,  integrity 
and  exemplary  conduct ;  vet  such  were  the  incidents  that  characterized  the  panic  of 
1836. 

.  .  .  .  .  There  was  another  panic  in  18S9  which  may  be  said  to  have  extended 
itself  by  a  series  of  fits  and  convulsions  all  Uirough  the  years  184(>  and  1841,  at  which 
date  our  commercial  system  was  reduced  to  the  lowest  ebb  of  distress.  The  number  of 
banks  which  skipped  or  disappeared  during  this  interval  was  unusually  great,  the  diffi- 
culty of  getting  money  as  rigid  as  ever,  and  the  stagnation  of  our  commerce,  the  scarcity 

of  good  mercantile  paper,  extreme Late  in  1S40  began  the  storm  which, 

continuing  to  rage  all  through  1841,  and  not  even  as  yel  (in  1S42)  blown  over,  has' 
swept  away,  during  its  protracted  and  ruinous  course;  an  unusual  number  of  banking 
establishments.  A  history  of  these  misfortunes,  in  their  various  details,  is  here  out  of 
the  question;  to  trace  the  separate  cases  to  their  source,  and  detail  at  length  their  con- 
sequences, would  fill  a  volume,  and  then,  in  all  probability,  leave  the  subject  unex- 
hausted I  had  prepared  a  summary  of  the  losses  occasioued  by  the' different  failures 
amongst  the  private  and  joint  stock  banks  during  the  last  two  yea-s,  but  the  amount 
appears  so  formidably  large  on  the  one  side  and  so  small  on  the  other,  that  it  would  be 
invidious  to  publish  it.  .  '.-■'..  .  .  •  .  .  . 

The  cause  of  the^e  disasters  are  explained  'by  tha  eminent  banker,  Jones 
Loyd,  who,  speaking  of*  the  crisis  of  1840,  said  : 

Against  the  actual  exhaustion  of  its  treasure  by  a  drain  through  the  foreign  ex- 
changes, the  bank,  under  almost  any  circumstances,  has  the  power  of  protecting  her- 
self; but  to  do  this  she  must  produce  upon  the  money  market  a  pressure  ruinous  from 
its  suddenness  and  severity  ;  she  must  save  herself  by  the  destruction  of  all  around  her. 

I  havesaid  that,  among-  other  causes,  the  creation  of  foreign  loans  in  Eng- 
land will  cause  a  demand  for  bullion- for  export,  and,  consequently,  cause 
fluctuationsin  the  quantity  and  value  of  money,  and,  in  proof  of  this,  I  re- 
fer to 

THE  CRISIS  OF  1820  AKD  1826. 

If  we  recur  to  the  history  of  the  times  it  will  do  much  to  establish  the 
truth  of  the  arguments,  and  to  enforce  the  ne  essity  of  adopting  the  measures 
which  I  propose  as  the  only  means'  of  preventing  the  frequent  recurrence  of 
the  overwhelming  disasters  which  have  fallen  upon  the  commercial  world,  and 
especially  upon  the  United  States,  as  the  consequence  of  the  demand  for  specie, 
created  by  the  measures  and  policy  of  the  Bank  of  England. 

To  supply  the  Government  of*the  United  States  with  funds,  to  prosecute  the 
war  of  1812,  the  Banks  in  the  Southern  and  .Western  States  were. compelled 
to  suspend  specie  payment.  Congress  in  -  1 81 G  chartered  the  Bank  of  the 
United  States  as,  a  means  of  aiding,  or  rather  of  coercing,  the  resumption  of 
specie  payments.  The  Indian  tide  to  large  tracts  of  fertile  lands  was  extin- 
guished by  the  peace,  which  lands  were  immediately  surveyed  and  put  upon 
the  market.  The  notes,  of  the  suspended  banks  were  received  in  payment  for 
these  lands  and  for  duties  ;  these  notes  were  placed  in  the  Bank  of  the  United 
States  as  Government  deposits,  and  by  that  Bank  presented  to  the  local  Banks 
for  specie.  Sir  Robert  Peel's  bill  requiring  the  Bank  of  England  to  resume 
specie  payment  of  her  one  pound  notes  in  1822,  and  generally  in  1825,  passed 
in  1819,  the  consequence  was  that  the  specie  which  was  thus  withdrawn  from 
the  local  banks  by  the  Bank  of  the  United  States,  was  withdrawn  from  that 
Bank  by  the  operations  of  commerce  and  remitted  to  England,  until,  in  Au- 


27 

gust;  1825,  the  specie  in  the  Bank  of  England  had  increased  to  more  than 
seventy-five  millions  of  dollars.  But  the  pressure  created  by  the  Bank  of  the 
United  States  upon  the  local  banks,  had  been  such,  and  the  opposition  to  the 
Bank  became  so  great  in  Virginia,  Maryland,  Tennessee,  Kentucky,  Ohio,  and 
other  Southern  and  Western  States,  that  it  was  arranged  between  Mr.  Cheves, 
then  the  President  of  the  Bank,  and  JVIr.  Crawford,  the  Secretary  of  the  Trea- 
sury, that  large  sums  were  left  on  deposit  with  certain  selected  local  banks, 
upofl  condition  that  they  would  convert  the  notes  of  other  local  banks  into 
specie,  to  be  by  them  deposited  in  the  Bank  of  the  United  States.  Thus,  the 
Banks. of  Edwardsville  in  Illinois,  and  of  Missouri  at  St.  Louis,  being  on  oppo- 
site sides' of  the  river,  were  each  made  depositaries,  with  large  standing 
deposits,  upon  condition  that  they  would  cash  the  notes  of  each  other  and 
remit,  by  the  same  steamer,  the  specie  thus  obtained  to  the  Branch  of  the 
United  States  Bank  in  Louisville,  Kentucky.  Mr.  Cheves,  then  the  President 
of  the  Bank,  in  a  Report  to  the  Stockholders,  in  1S22,  says  :  "The  specie  in 
the  vaults  at  the  close  of  the  day,  on  the  1st  of  April,  1819,  was  only  126,745 
dollars  and  28  cents,  and  the  Bank  owed  to  the  City  Banks,  deducting  bal- 
ances due  to  it,  79,125  dollars  and  99  cents.  It  is  true,  there  were  in  the 
mint  267,978  dollars  and  9  cents,  and  in  transitu" from  Kentucky  and  Ohio, 
overland,  $250,000;  but  the  Treasury  dividends  were  payable  on  that  clay  to 
the  amount  of  near  500,000  dollars,  and  there  remained  at  the  close  of  the 
day  more  than  one  half  the  sum  subject  to  draft.         *  *  *  * 

On  the  12th  of  the,  same  month,  the  Bank  had  in  it# 'vaults  but  71,522  dol- 
lars and  47  cents,  and  owed  to  the  City  Banks  .a  balance  of  196,148  dollars 
and  47  cents;  exceeding  the  specie  in  its  vaults  124,895  dollars  and  19  cents. 
*  *  -  •*  J*  The  Bank  in  this  situation,  the  office  in  New  York 
was  little  better,  and  the  office  in  Boston  a  great  deal  worse.  At  the  same 
time,  the  Bank  owed  to  Baring  Brothers  &  Co.,  and  to  Thus.  Wilson  &  Co., 
nearly  900,000  dollars,  which  it  was  bound  to  pay  immediately,  and  which 
was  a  charge,  upon  its  vaults  to  that  amount.  It  had,  including  the  notes  of 
its  offices,  a  circulation  of  six  millions  of  dollars." 

The  effect  of  this  pressure  was  another  suspension  of  specie  payments,  and 
a  depreciation  of  more  than  fifty  per  cent,  of/ the  exchangeable  values  of  pro- 
perty, and  the  Government  of  the  United  States  was  compelled  to  compro- 
mise with  the  purchasers  of  public  lands  on  the  deferred  payments,  allowing 
them  to  consolidate  their  payments  theretofore  made  at  the  rate  of  less  than 
fifty  cents  on  the  dollar.  That  is,  a  party  who  had  purchased  lands  and  paid 
ten  thousand  dollars,  owing  thirty  thousand,  was  permitted  to  relinquish  lands 
to  the  amount  of  thirty  thousand  dollars  in  pavrnent  of  his  debt,  and  apply 
the  ten  thousand  paid,  at  the  rate  of  less  than  fifty  cents  on  the  dollar,  in  pay- 
ment for  lands  not  relinquished.  Such  were  the  effects,  in  England  and  in  the 
United  States,  of  the  delusion  which  enforced  the  necessity  of  maintaining  a 
•specie  currency.  And  for  whose  benefit?  Did  it  benefit  the  people,  or  the 
Government  of  England,  or  of  the  United  States  ?  No  ;  for  inasmuch  as  the 
delay  in  the  resumption  of  specie  payment  by  the  Bank  of  England,  and  the 
large  amount  of  its  paper  in  circulation,  enabled  the  country  banks  and  pri- 
vate bankers  greatly  to  increase  their  issues,  the  effect  was  to  beget  in  England 
a. spirit  of  speculation,  which  embraced  not  only  large  foreign  loans,  but  ran 
into  the  working  of  foreign  mines   and  other  visionary  and  delusive  schemes. 


28 

The  Edinburgh  Review,  of  1826,  gives  a  table  showing  in  detail  the  sums  ad- 
vanced by  England  on  loans  to  Prussia,  Spain,  Naples,  Denmark,  Columbia, 
Chili,  Poyais,  Peru,  Portugal,  Austria,  Greece,  "Buenos  Ayres,  Brazil,  Mexico, 
Guatemala,  Guadalaxara,  which,  with  other  advances  on  French,  Russian  -and 
American  securities,  made  the  sum  $522,692,500  advanced  by  England,  on 
foreign  account,  during  the  eight  years,  from  1818  to  1825,  inclusive..  It  is 
apparent  that  the  advances  made  upon  these  loans  must  have  created  an  ex- 
traordinary demand  for  specie  in  England,  and  it  is  obvious  that,  as  the  loss 
of  five  and  a  half  millions  of  dollars,  in  1857,  by  the  banks  of  New  York, 
created  results  so  disastrous,  as  described  by  Gibbon,  the  export  of  so  large 
an  amount  to  pay  off 'the  foreign  loans,  produced  the  overwhelming  losses,- 
bankruptcies  and  distress  so  forcibly  referred  to  by  Hardcastle  and  the  Edin- 
burgh and  London  .Quarterly  Reviews,  and  that  that  monetary  crisjs  was  caused 
by  the  fact  that  the  currency  of  England  was  convertible  into  specie,  and  that 
the  demand  for  specie  thus  produced,  compelled  the  bank,  to  use  the  words 
of  Jones  Loyd,  quoted  above,  to  "  save  herself  by  the  destruction  of  all 
around  her." 

I  give  the  following  from  the  London  Quarterly,  of  September,  1832, 
illustrating  the  effect  of  changing  a  paper  into  a  metallic  currency :  "As  a 
single  specimen  of  the  condition  of  our  internal  trade,  we  give  the  memo- 
rial of  the  iron  and  coal  masters  of  Shropshire,  Staffordshire  and  Wales, 
presented  to  Earl  Grey  by  a  deputation  in  October  last,  after  being  signed 
by  more  than  three-fourths,  of  the  trade  in  those  great  manufacturing  dis- 
tricts." 

We,  the  undersigned,  iron  masters  and  coal  masters  of  the  Staffordshire '  iron  and 
coal  districts,  think  it  our  duty  respectfully  to  represent  to  His  Majesty's  Government 
the»following  facts: 

1.  That  for  the  last  five  years,  ever  since  what  is  called  the  panic  of  1825,  we  have 
found,  with  very  slight  intermissions,  a  continually  increasing  depression  iathe  prices  of 
the  products  of  industry,  and  more  particularly  in  those  of  pig  and  bar  iron,  which  have 
fallen  respectively,  Torn  upward  of  81.  per  ton  to  under  31.  per  ton,  arid  from  £15  per 
ton  to  under  £5  per  ton. 

i.  Against  this  alarming  and  long  continued  depression,  we  have  used  every  possible 
effort  in  our  power  to  make  bread.  We  have  practiced  all  manner  of  economy,  and 
have  had  recourse  to  every  possible  improvement  in  the  working  of  our  mines  and  manu- 
factories. Our  workmen's  wages  have  in  many  instances  been  reduced,  and  such  reduc- 
tion has  been  attended  with,  and  effected  by,  very  great  distress ;  but  the  royalties,  rents, 
contracts,  and  other  engagements,  under  which  we  hold  our  respective  works  and  mines, 
have  scarcely  been  reduced  at  all,  nor  can  we  get  them  effectually  reduced,  because  the 
law  enforces  the  payment  in  full. 

3.  The  prices  of  the  products  of  our  industry  having  thus  fallen  within  the  range  of 
the  fixed  charges  arid  expenses' which  the  law  compels  us  to  discharge,  the  just  and 
necessary  profits  of  our  respective  trades  have  ceased  to  exist,  and. in  many  cases  a  posi- 
tive loss  attends  them. 

4.  Under  these  circumstances,  we  have  long  hesitated  in  determining  what  line  of  con- 
duct our  interest  and  oUr  duties  require  us  to  adopt.  If  we  should  abandon  our  respec- 
tive trades,  our  large  and  expensive  outlays  in  machinery  and  erections  must  be  sacrificed 
at  an  enormous  loss  to  ourselves,  and  our  honest  and  meritorious  workmen  must  be 
thrown,  in  thousands,  upon  parishes  already  too  much  impoverished  by  their  present 
burthens  to  support  them ;  and,  if  we  should  continue  our  present  trades,  we  see  nothing 
but  the  prospect  of  increasing  distress  and  certain  ruin  to  all  around  us. 

5.  In  our  humble  opinion,  the  great  cause  which  has  been  mainly  instrumental  in  pro- 
ducing this  depression  and  distress  in  our  respective  trades,  and  among  the  productive 
classes  of  the  country  generally,  is  the  attempt  to  render  the  rents,  taxei,  royalties,  and 


.;♦,,.'  29 

ither  various  engagements  and  obligations  of  the  country,  convertible,  by  law,  into  gold, 
it  £3  17s.  10^-d.  per  oz.  This  low  and  antiquated  price  of  the  metallic  standard  of 
'alue  is  no  longer  capable  of  effecting  a  just  and  equitable  distribution  of  our  products 
jet  ween  the  producer  and  the' consumer ;  it  renders  incompatible  the  permanent  exist- 
mce  of  remunerating,  prices,  without  such  a  reduction  of  taxation  as  we  cannot  hope  to 
;ee  effected  in  time  to  afford  us  any  relief — and  it  thus  tends,  ultimately  and  surely,  to 
lestroy  the  industry,  and  the  peace  and  happiness  of  the  country. 

6.  That  until  the  establishment  of  a  circulating  medium  of  a  character  better  suited 
o  the  various  and  complicated  demands  of  society,  and  to  the  increased  transactions  and 
Dopulation  of  the  country,  and  more  competent  to  effect  an  interchange,  and  preserve  a 
•emunerating  level  of  prices  in  the  products  of  industry  generally,  we  can  see  no  pros- 
ject  of  any  permanent  restoration  of  the  prosperity  of  our  trades,  or  of  the  country 
jeing  able  to  escape  the  most  frightful  sufferings  and  convulsions. 

We,  therefore,  most  respectfully,  but  very  earnestly,  request  the  early  attention  of 
lis  Majesty's  Government  to  these  great  facts  and  considerations,, and  we  insist  that 
hey  will  recommend  to  Parliament  the  speedy  establishment  of  some  just,  adequate  and 
efficient  currency,  which  may  properly  support  the  trade  and  commerce  of  the  country,  and 
ireserve  such  a  remunerating  level  of  prices  as  may  ensure  to  the  employers  of  labor  the 
air  and  reasonable  profits  of  their  capital  and  industry,  as  well  as  the  means  of  paying 
he  just  and  necessary  wages  to  their  woi  kmen. 

Such  are  the  views  of  practical  working  men  in  England  of  the  opera- 
ion  of  contracting  a  debt  in  paper  money  at  the  rate  of  $150  for. one  hun- 
Ired,  and  paying  the  interest  of  three  per  cent,  on  it  in  specie.  If  such 
was  the  effect  there,  what  will  be  the  effect  here  of  paying  the  interest,  in 
specie,  on  so  large  a  debt  as  we  will  have  contracted,  at  the  rate  of  twenty 
rbr  one  ?  '  The  London  Quarterly  says  : 

Our  country  gentlemen  must  learn  to  penetrate  the  arcana  of  the  Exchanges,  and 
'athom  the  depths  of  the  banking  system,  if  they  mean  to  preserve  their  broad  acres 
:'rom  the  grasp  of  the  mortgagee,  and  their  title  deeds  and  mansions  from  the  blaze  of 
■evolutionary  fires.  Difficult  and  obscure,  indeed  !  Yes,  the  subject  is  difficult,  just  "as 
difficult  to  the  public  comprehension  as  is  -  juggler's  trick,  by  which,  with  a  "  heigh, 
presto!"  he  conjures  the  half  crown  we  thought  we  had  safe  in  our  pocket  into  his  own. 
How  the  money  vanished  it  is  not  so  easy  to  say  ;  but  it  is  nevertheless  certain  that  we 
aad  it,  and  ought  still  to  have  it,  but  he  has  got  it.  So  it  was  exactly  with  the  currency 
uggle.  Few  of  the  sufferers  can  explain  or  understand  how  it  happened,  but  the  fact 
s  very  plain  to  them  that  they  have  somehow  lost  a  great  deal  of  money,  and  other 
oersons  have  got  hold  of  it.  A  little  consideration,  however,  may,  we  think,  render  the 
lature  of  the  trick  intelligible  to  the  simplest.  It  is  very  clear  that  those  who  are  in 
jusiness  pay  nearly  the  same  sum  in  taxes,  at  present,  as  when  the'goods  they  deal  in  sold 
br  double  their  present  prices  ;  so  that  they  really  pay  two  hundred  weight  of  wool,  or 
)f  cheese,  or  of  sugar,  or  two  pieces  of  cloth,  linen,  or  calico,  or  two  tons  of  iron  or  hard- 
ware, to  the  tax  gatherer,  for  one  that  they  formerly  paid ;  and  the  taxes,  reckoned  in 
'foods,  which  is  the  only  sure  way  of  knowing  their  cost  to  the  producers  of  goods,  by 
whom  they  are  paid,  are  clearly  twice  as  high  at  the  end  of  sixteen  years  of  peace,  as 
'hey  were  at  the  close  of  a  long  war !  Is  it  wonderful  then  that  the  productive  classes 
are  laboring  under  severe  distress  ?  That  peace,  which  usually  brings  plenty,  has  thrown 
way  her  emblematic  horn,  and  selected  hunger  for  her  motto!  And  can  there  be  any 
loubt  that  the  fall  in  prices,  which  has  wrought  this  fearful  evil,  is  the  necessary  result, 
foretold  by  ourselves  and  many  others  at  the  time,  of  the  legislation  ol  1819  and  J826, 
which,  by  crippling  the  banking  system  of  England  and  attempting  a  currency  of  dear 
netal  for  one  of  cheap  paper,  has  Caused  a  continually  increasing  scarcity  of  money  and 
contraction  of  credit  ?  .  .  .  .  .  .  . 

If  we  succeed  in  showing  that  the  unjust  restrictions,  kept  up  by  the  present  laws,  on 
he  circulating  medium  of  exchange,  have  had  the  effect,  within  a  few  years  past,  of 
■ilently  but  forcibly  transferring  a  vast  amount  of  property  from  the  possession  of  one 
;lass  to  that  of  another,  who  had  no  just  right  or  title  to  it — of  covertly  despoiling,  in 
short,  one  portion  of  the  community,  namely:  the  persons  engaged  in  industry,  for  the 
benefit  of  another  portion,  the  owners  of  fixed  money  obligations,  payable  out  of  the 


30 

labor  and  capital  of  the  former — it  will  be  acknowledged  that,  until  the  laws  which  have 
perpetuated  and  continue  "o,  sanction  this  wholesale  swindling  are  repealed,  there  is  no 
safety  for  property  ;  nor  can  there  be  any  reliance  on  the  stability  of  those  institutions, 
of  .which  a  confidence  in  the  security  of  property  is  the  indispensab|tf  foundation. 

Remarking  upon  the  Staffordshire  memorial,  the  Review  says : 

The  sufferers  here  most  correctly  attribute  their  losses  to  the  late  increase  in  the  value 
of  money,  but  they  seem  to  look  for  relief,  in  a  deterioration  of  the  standard.     In  this 
View  we  do  not  concur  with  them,  only  because  we  think  so  desperate  a  remedy  is  not 
necessary,  for  that  other  and  unexceptionable  plans  may  be  resorted  to  for  the  relief  of 
industry.    .....     Next  to  a  direct  increase  of  the  supply  of  the  precious  metals,  the 

most  obvious  resource  setlms  to  be  to  augment  the  efficiency  of  that  which  we  possess, 
by  a  degradation  of  the  standard — in  other  words,  by  diminishing  the  intrinsic  value  of 
the  coinage;  cutting,  for  instance,  our  sovereigns,  shillings,  and  other  pieces  of  money, 
into  two  or  more  parts,  which  should  each,  by  law,  retain  the  nominal  value  of  the 
whole.  This  is,  in  substance,  the  proposal  which  seems  to  find  most  favor  with  the  per- 
sons who  have  spoken  or  written  on  the  subject  of  the  currency  for  some  years  past.  It 
is  this,  as  we  have  seen,  that  is  advocated  by  the  iron  trade,  and  by  their  powerful 
champions,  the  Messrs.  Atwood.  .It  is  this  to  which  Mr.  Weston,  and  a  large  body  of 
agriculturalists  have  been  long  pointing  as  the  only  practicable  mode  of  permitting  them 
to  come  to  an  equitible  adjustment  with  their  creditors,  public  and  private 

,  ;  .  .*.  We  acknowledge,  indeed,  the  force  of  the  retorts  levelled  by  the  advo- 
cates of  this  alteration  against  their  opponents,  when  the  necessity  of  preserving  the 
national  faith  inviolate'is. thrown  in  their  teeth.  Tljey  ask,  with  bitterness,  and  with 
justice,  too: 

"Is  faith  to  be  kept  only  with  the  monied  interests?  Was  no  good  faith  to  be  kept 
with  the  landholder,  the  merchant,  the  manufacturer,  the  vast  laboring  population  who 
bore  the  weight  of  the  national  struggle,  who  cheerfully  made  great  and  numerous 
sacrifices  during  the  war,  and  who  continue  the  real  strength  and  greatness  of  the  King- 
dom? 3  o  faith  whatever  was  kept  with  them.  They,  through  their  representatives,  en- 
gaged themselves  to  a  debt  of  so  many  pound  notes — but  not  to  the  same  number  of 
sovereigns— to  a  debt  consisting  of  money,  at  its  then  value,  but  they  protest  being  held 
responsible  for  the  same  annual  sum  now  that  its  value  has  been  artificially  doubled. 
Does  not  good  faith  require  that  the  scale  should  be  held  fairly  between  debtor  and 
creditor?  Was  it  consistent  with  the  national  faith,  upon  the  plea  of  arresting  the 
progress  of  depreciation  in  1819,  to  turn  the  tables  wholly  the  other  way,  and,  by  re- 
viving an  obsolete  standard,  to  give  to  monied  obligations  a  value  that  is  a  command 
over  the  produce  and  property  of  others,  which  t*ie  persons  originally  forming  those  con- 
tracts could  never  have  contemplated,  and  which  consigned  at  once  to  overwhelming 
and  unmerited  ruin,  the  commerce,  the  manufactures  and  agriculture  of  the  empire?" 

We  freely  admit  the  weight  of  these  remonstrances.  We  acknowledge  that,  through 
an  overstrained  anxiety  for  observing  the  letter  of  the  national  faith,  the  spirit  of  the 
obligation  was  disregarded  and  a  gross  injustice  committed  on  the  great  body  of  pro- 
ducers throughout  the  Kingdom,  as  well  as  on  all  debtors.     It  is  true — 

"  Nothing  could  be  more  honorable  than  the  feeling  which  induced  our  statesmen  to 
return  to  the  ancient  standard  ;  but,  to  our  sorrow,  their  estimate  of  its  effects  was 
much  below  the  mark.  They  did  not  see  what  a  revolution  of  property  would  ensue. 
They  consulted  our  honor,  our  reputed  solvency,  but  not  our  real  means.     Mr.  Kicardo 

told  them  the  change  would  be  five  per  cent.     Events  have  proved  it  fifty 

There  remains  another  course  for  consideration ;  one  which  we  have  urged  for  some 
time  past  upon  the  public,  as  the  true  mode  of  relief  from  our  monetary  difficulties. 
.  .  .  .  .  We  mean  the  removal  of  the  mischievous  restrictions  which  now  fetter 
the  circulation  of  credit  through  this  country,  and  the  concession  of  the  free  *ight  of 
commerce  to  provide  itself  with  whatever  instruments  it  may  require  for  effecting  its 
exchanges  uninterfered  with  by  those  officious  legislative  intermeddlings  which  expe-  , 
rience  has  sufficiently  proved  to  be  fatal  to  almost  everything  they  touch,  but  to  nothing  ' 
so  much  so  as  to  the  currency.  It  is  physically  impossible  to  carry  on  the  commerce  of 
the  civilized  world  by  the  aid  of  a  purely  metallic  currency — no,  not  though  our  gold  and 
silver  coins  were  every  tenth  year  debased  to  a  tenth  !     Why,  in  London  alone,  five 


31 


millions  sterling  (825,000,000)  are  daily  exchanged  at  the  Clearing  House  in  tlie  coarse 
of  a  few  hours.  We  should  like  to  see  the  attempt  made  to  bring  this  infinity  of  trans- 
actions to  a  settlement  in  coined  money.  Credit  money,  in  some  shape  or  other,  always 
has,  and  must  have,  performed  the  part  of  a  circulating  medium  to  a  very  considerable 
extent.  And  (by  one  of  those  wonderful  compensatory  processes  which  so  frequently 
claim  the  admiration  of  every  investigation  of  civil  as  well  as  of  physical  economy) 
there  is  in  the  nature  of  credit  an  elasticity  which  causes  it,  when  left  unshackled  by 
law,  to  adapt  itself  to  the  necessities  of  commerce  and  the  legitimate  demands  of  the 
market.  .  .  .  .  The  only  measures  which  appear  to  us  to  be  needed  upon  the  expira- 
tion of ,  the  .Bank  Charter,  are  :  1st.  That  all  banks  be  required  to'deposi.t  security  in 
Government  stock  to  the  full  amount  of  the  notes  they  issue  2d.  That  the  law  be  re- 
pealed which  forbids  the  issue  of  notes  under  five  pounds.  3d.  We  would  make  the 
notes  of  metropolitan  banks  only  convertible  into  bars  of  bullion,  on  the  plan  of  Mr. 
Kicardo,  and  allow  the  notes  of  country  banks  to  be  paid  in  those  of  the  metropolitan 
banks." 

The  following  table,  compiled  from  data,  given  by  John  Taylor,  Jr.,  and 
Ayres'  Financial  Register,  gives  the  amounf,  of  debt  bonded,  the  equivalent 
in  three  per  cent  consols,  the  stock  created  for  one  hundred  pounds  in  money, 
the  highest  and  the  lowest  prices  for  consols,  and  the  market  value  of  paper 
currency  per  cent.,  from  1800  to  1S24,  inclusive  : 


Amount  of 

Equivalent 

Stock  ere- 

'the 

The 

Market  value  of 

Years 

Debt 

in  3  per  cent. 

ated  for  £100 1 

Highest 

Lowest 

paper  cur- 

Bonded 

Bonds 

in  Money 

Price 

Price 

rency  per  cent. 

1S00 

£20,500,000 

£32,185,000 

£158  50d. 

67i- 

60 

£100  00s.  2d. 

18-01 

36,910,000 

.  63,578,100 

174  54 

70 

54+ 

■91  12  6 

1802 

25,000.*000 

32,990,630 

132  17 

79 

66 

91  14  2 

1S03 

12,000,000 

20,483,330 

173  55 

75 

50i 

97  6  10 

1804 

14,500,000 

26,390,000 

135  00 

m 

53| 

97  6  10 

1805 

22,500,000 

•  41,800,000 

177  20 

62 

Ol 

97  6  10 

1806 

20,000,000 

33,200,000 

167  70  . 

64f 

&8J 

97  6  10 

1S07 

15,700,000 

24,798,290 

159  20 

"  64f 

.   57| 

97  6  10 

1808 

14,500,000 

23,530,622 

162  67 

60£ 

22§ 

97  6  10 

1809 

22,532,100 

35.218,740 

161  39 

m 

63| 

97  6  10 

1810 

21,711,000 

33,112,106 

152  67 

71 

63+ 

97  6  10 

1811 

24,000,000 

39,724,620 

166  53 

&6| 

61J 

86  10  6 

1312 

34,721,325 

57,198;3S0 

130  00 

63 

551, 

92  3  2 

1813 

64,755,700 

118,736,690 

134  87 

67* 

"  54J 

79  5  8 

1814 

•  '24,007.400 

36,839,930 

164  17 

72* 

61* 

77  2  0 

1815 

54,135,589 

102,7S7,340 

191  52 

655 

575 

'   74  16  6 

1816 

64| 

59. \ 

•83  5  8 

1817 

62 

62 

,  70  6  10 

1818 

72 

73 

95  11  0 

ma 

79 

•   64| 

97  8  0 

1820 

m 

65s  • 

106  0  0 

■  1S21 

78| 

6SJ 

100  .0  0 

1S22 

83 

75s 

100  0  0 

1823 

&§f 

72 

100  0  0 

1824 

96| 

S4£ 

100  0  0 

Total, 

£427,473,114 

£723,570,-672 

A  v'  rage 

£167  60 

73 

63 

£93  15s.  Id. 

*  It  will  be  seen  that,  although  the  Bank  of  England  suspended  payment  in 
179V,  the  notes  were  at  par  with  gold  in  1800  and  again  in  1820,  and  con- 
tinued at  par  until  it  resumed  payment  in  1825,  the  average  depreciation 
during  the  suspension  being  less  than  seven  per  cent.    It  is  a  striking  fact 


32 

that  the  greater  part  of  this  depreciation  was  during  the  years  from  1810«to 
1815,  inclusive,  when  the  loans  and  subsidies  given  to  her  allies,  and  the 
expenditures  of  the  French  war,  created  an  extraordinary  demand  for  specie 
to  be  disbursed  on  the  continent  (these  loans  and  subsidies  amounting  to  the 
enormous  sum  of  $301,047,813  ! !!). 

McCulloch,  in  a  note  (p.  78).,  says: 

So  early  as  December,  1794,  the  Court  of  Directors  (of  the  Bank)  represented  to 
Government  their  uneasiness  on  account  of  the  debt  due  by  the  Government  to  the 
Bank,  and  anxiously  requested  a  repayment  of  at  least,  a  considerable  part  of»what  had 
been  advanced.  In  January,  1795,  they  resolved  to  limit  their  advances  upon  Treasury 
bills  to  £500,000  ;  and,  at  the  same  time,  they  informed  Mr.  Pitt  that  it  was  their  wish  • 
that  he  would  adjust  his  measures  for  the  year,  in  stick  a  manner,  as  ?wt  to  depend  on 
any  assistance  from  them.  On  the  11th  of  February,  1796,  they  resolved,  "that  it  is 
the  opinion  of  this  Court,  founded  upon  the  experience  of  the  late  Imperial  loan,  that  if  any 
further  loan  or  advance  of  money  to  the  Emperor,  or  to  any  of  the  foreign  States,  should, 
in  the  present  state  of  affairs,  take  place,  it  will,  in  all  probability,  prove  fatal  to  the 
Bank  of  England" 

If  we  recur  to  the  value  of  money,  as  compared  witli  the  value  of  the  mass 
of  circulating  commodities,  it  will  be  seen  that  this  difference  between  the 
value  of  bank  notes  (paper  money)  and  specie  indicates  an  increased  value 
of  the  precious  metals  rather  than  a  decreased  value  of  paper  money. 

By  reference  to  the  table  given  above,  it  will  be  seen  that,  in  1814,  the 
public  credit  was  depreciated  nearly  84  per  cent.,  and  that  the  value  of  paper, 
as  compared  with  gold,  fluctuated  between  l2i  and  6l£  per  cent.,  and  yet, 
the  Edinburgh  Review,  speaking  of  the  effect  of  the'eauses  then  operating  on 
prices  in  England,  says  : 

The  bank  failures  that  then  occurred  were  the  more  distressing,  as  they  chiefly  affected 
the  industrious  classes,  and  frequently  swallowed  up  in  an  instant  the  fruits  of  a  long 
life  of  unremitting  and  laborious  exertion.  Thousands  upon  thousands,  who  had,  in 
1813,  considered  themselves  as  affluent,  found  they  were  destitute  of  all  real  property, 
and  sunk,  as  if  by  enchantment  and  without  any  fault  of  their  own,  into  the  abyss  of 
poverty!  The  late  Mr.  Horner,  the  accuracy  and  extent  of  whose  information  on  such 
subjects  will  not  be  disputed,  stated  in  his  place  in  the  House  of  Commons,  that  the 
destruction  of  the  country  bank  paper,  in  1815  and  1816,  had  given  rise  to  an  universality 
of  wretchedness  and  misery,  which  had  never  been  equalled,  except,  perhaps,  by  the 
breaking  up  of  the  Mississippi  scheme  in  France. 

Engaged,  as  England  was,  in  a  struggle  upon  which,  as  she  believed,  de- 
pended her  maritime  and  commercial  supremacy,  she  was  compelled  to  ad- 
vance loans  *and  subsidies  to  her  allies,  and  hence  we  find  that  the  Bank  was 
allowed  to  suspend  specie  payment  in  1797,  and  that  in  the  years  1814  and 
1815  Englaud  advanced,  in  loans,  and  subsidies,  to  Spain,  Portugal,  Sicily, 
Sweden,  Russia,  Prussia,  Austria,  France,  Hanover,  Denmark,  and  other 
minor  Powers  of  the  Continent,  £19,366,307  15s.  9d.  (or  890,831,539),  and 
it  is,  therefore,  apparent,  that  inasmuch  as  the  current  expenditures  of  the 
British  army  on  the  Continent,  as  well  as  these  large  loans  and  subsidies,  were 
paid  iu  specie,  the  demand  for  specie  to  meet  these  payments  caused  the  rela- 
tive depreciation  «of  bank  notes,  the  fall  of  prices,  the  destruction  of  the 
country  banks,  and  the  consequent  failures,  bankruptcies  and  distress.  Had 
England  used  her  credit,  as  I  propose,  instead  of  using  the  Bank  credit,  there- 
would  have  been  no  such  failures  of  her  banks  and  no  such  fall  of  prices  or 
depreciation  of  the  values  of  property.  Is  it  not  obvious  that,  inasmuch  as 
the  whole  capital  of  the  Bank  consisted  of  the  public  credit,  the  Government, 


33 

having  the  power  of  taxing  and  funding,  could  have  purchased  gold  at  the 
same  price,  or  less,  than  that  which  the  bank  paid  for  it  ?  Why,  then,  did 
the  Government  give  her  credit  bearing  interest  in  exchange  for  bank  notes 
bearing  no  interest  ? 
*As  bank  notes  were  not  current  on  the  continent  the  Government  could 
ot  pay  the  loans  and  subsidies  to  their  allies'  in  bank  notes,  and  were, 
therefore,  compelled  to  give  a  premium  for  gold ;  and  hence  the  deprecia- 
tion of  bank  notes  as  compared  with  gold. 

PAPER     MONET. 

McCulloch,  in  his  article  upon  the  general  principles  of  banking,  says  : 

Every  country  has  a  certain  number  of  exchanges  to  make  ;  and  whether  these  are 
fleeted  by  the  employment  of  a  given  number  of  coins  of  a  particular  denomination,  or 
y  the  employment  of  the  same  number  of  notes  of  the  same  denomination,  is,  in  this 
respect,  of  no  importance  whatever.  Notes  which  have  been  made  a  legal  tender,  and 
are  not  payable  on  demand,  do  not  circulate  because  they  are  of  the  same  real  value  as 
the  commodities  for  which  they  are  exchanged,  but  they  circulate  because  having  been 
selected  to  perform  the  functions  of  money,  they  are  as  such  received  by  all  individuals 
in  payment  of  their  debts*..  Notes  of  this  description  may  be  regarded  as  a  sort  of 
tickets  or  counters  to  be  used  in  computing  the  value  of  property,  and  in  transferring  it 
from  one  individual  to  another.  And  as  they  are  nowise  affected  by  fluctuations  of 
credit,  their  value,  it.  is  obvious,  must  depend  entirely  on  the  quantity  of  them  in  circu- 
lation as  compared  with  the  pavgrnents  to  be  made  through  their  instrumentality,  or  the 
business  they  have  to  perform:  By  reducing  the  supply  of  notes  below  the  supply  of 
coins  that  would  circulate  in  their  place  were  they  withdrawn,  their  value  is  raised  above 
the  value  of  gold ;  while  by  increasing  them  to  a  greater  extent  it  is  proportionally 
lowered. 

Hence,  supposing  it  were  possible  to  obtain  ,vny  security  other  than  convertibility  into 
the  precious  metals,  that  notes  declared  to  be  a  legal  tender  would  not  be' issued  in  excess, 
but  that  their  number  afloat  would  be  so  adjusted  as  to  preserve  their  value  as«com- 
pared  with  gold  nearly  uriitorm.  the  obligation  to  pay  them  on  demand  might  be  done 
away.  But  it  is  needless  to  say  that  no  such  security  can  be  obtained.  Whenever  the 
power  to  issue  paper,  not  immediately  convertible,  has  been  conceded  to  any  set  of 
persons  it  has  been  abused,  or,  which  is  the  same  thing,  such  paper  has  been  uniformly 
uver  issued  or  its  value  depreciated  by  excess. 

It  will  be  seen  that  McCulloch's  objection  to  an  unconvertible  paper  is 
limited  to  the  fact  that  whenever  the  power  to  issue  such  paper  has  been 
conceded  to  any  sat  of  persons  they  have  uniformly  issued  it  in  excess.  It 
is  apparent  that  he  refers  to  an  issue  of  such  paper  by  banks  and  bankers, 
and 'not  to  an  issue  by  Government  under  such  a  system  of  taxation  and 
funding  as  would  limit  the  sum  in  circulation  to  the  sum  wanted  as  money. 
I  agree  that  an  over  issue  will  depreciate  the  value  of  such  a  paper,  and 
therefore  I  propose  not  that  it  shall  be  issued  by  the -banks  but  by  the 
Government,  and  that  the  excess  be  fanded,  and  that  the  funding  shall  be 
coerced  by  a  judicious  system  of  taxing.     He  adds  i 

Iu  1793,  1814,  1815,  1816,  and  in  1825,  a  very  large  proportion  of  the  country  banks 

were  destroyed,  and  produced  by  their  fall  an  extent  of  ruin  that  has  hardly  been 

,-  equalled  in  any  other  country.    And  when  such  disasters  have  already  happened  it  is 

surely  the  bounden  duty  of  Government  to  hinder  by  every  means  in  its  power  their 

recurrence. 

McCulloch  was  the  partisan  of  the  Bank  of  England,  and  his  remedy 

for  the  evils  of  which  he  complains  was  to  strengthen  that  bank  by  making 

'  large  bars  of  gold,  instead  of  the  current  coins  a  tender,  and  to  prevent  an 

'  issue  of  small  notes  by  the  country  banks.     He  believed  that  the  large 


34 

dealers  would  not  run  upon  the  bank  for  specie,  and  that  the  holders  of 
small  notes  were  liable  to  become  alarmed  and  demand  payment.  His 
remedy  was  suspension  on  small  sums  and  masses  of  bullion  for  large.  I 
would  recur  to  the  large  sums  remitted  by  the  Government  to  the  continent, 
for  the  support  of  the  armies  and  in  the  payment  of  subsidies,  as  the  ca*use 
of  the  demand  for  gold  in  1814,  1815,  and  in  Ik  16,  and  I  would  explain 
the  monetary  crisis  of  1825  by  the  fact  that  the  foreign  loans  contracted 
and  the  vast  speculations  entered  into  in  England  after  the  war,  and  before 
the  resumption  of  specie  payments  created  so  great  a  demand  for  specie  to 
comply  with  the  engagements  then  entered  into,  thai^  the  pressure  upon  the 
bank  and  the  contraction  of  the  currency  below  the  specie  level  produced 
then  the  ruinous  depreciation  of  the  values  of  property  as  compared  with 
gold.  For,  as  before  remarked,  it. is  obvious  that  it  was  the  increased  value 
of  gold,  and  not  the  decreased  value  of  bank  notes,  which  caused  the  dis- 
asters so  forcibly  described.     If,  instead  of  placing  in  the  bank  an  annual 

average  of  Exchequer  bills  of '., $102,145,552 

and  of  deposits : 36,552,166 

and  of  the  public  revenue .' 805,446,344 

making  of  public  resources $444,044,062 

the  Government  had  issued  its  own  credit,  in  a  shape  suitable  for  cur- 
rency, which  was  a  legal  tender,  and  receivable  in  payment  of  the  public 
dues,  and  fundable  at  a  proper  rate  of  interest  and  reconvertible  into  cur- 
rency, limiting  the  amount  in  circulation  to  the  sum  requisite  for  that  pur- 
pose by  a  proper  system  of  taxing  the  excess;  and  had  required  each  bank 
to  place  in  the  treasury  an  amount  of  the  reconvertible  funded  debt  as  a 
security  for  the  payment  of  their  notes,  there  would  have  been  no  such 
speculations  in  foreign  loans;  no  such  depreciation  of  the  value  of  credit 
or  of  property  would  have  then  occurred ;  and  consequently  there  would 
have  been  no  such  bankruptcies  and  distress.     The  power  to  coin  money 
and  regulate  its  value  is  vested  in  the  British  and  French  Governments  as 
in    ours,   and  as    the  French  livre  of  1789,  contains   only  the  seventy- 
eighth  part  of  the  original  livre  of  the  year  800,  and  the   English  pound 
unit,  contains  but  a  small  fraction  more  than  one-fourth  part  of  the  original 
pound  sterling,  and  the  individual  obligations,  as  well  as  the  public  debt  of 
England,  had  been  contracted  when  the  currency  was  abundant  and  cheap, 
instead  of  urging  the  issue  of  the  public  credit  as  money  regulated  aft 
proposed,  an  effort  was  made  to  reduce  the  value  of  the  coinage  by  increas- 
ing the  alloy  or  diminishing  its  weight,  and  the  issue  before  the  British 
public  was  the  use  of  bank  notes  or  of  a  metallic  coin  thus  depreciated, 
they  preferred  a  bank  note  convertible  into  specie ;  I    would  restore    the 
value  of  our  currency  by  making  it  convertible,  not  into  specie,  but  into  a 
six   per   cent,    re-convertible   bond,  and  would  coerce  the  conversion  by 
taxing  the  excess,  instead  of  depreciating  the  value  of  metallic  coins  by 
increasing   the   alloy  or  reducing  the  weight.  .  Few,  I  presume,  will  deny 
the  power  of  Congress  thus  to  depreciate  the  coins  of  gold  or  silver;   and 
as  in  that  case  the  depreciated  dollar  would  still  be  a  dollar,  it  is  clearly  in 
the  power  of  Congress  to  reduce  the  value  of  metallic   coins   much  below 
what  would  be  the  value  of  the  currency  under  the  system  which  I  pro- 


35 

pose.  If  the  alloy  in  the  metallic  coins  was1  so  increased,  or  the  weight 
was  so  reduced,  as  that  its  exchangeable  value  would  be  no  more  than  the 
value  of  the  paper  dollar  issued  by  Government,  the  dollar  would  be  a  dol- 
lar still,  and  as  much  a  legal  tender  as  it  now  is.  If  Congress  can  so  re- 
duce the  value  of  gold,  as  a  tender,  the  argument  that  Congress  cannot 
make  paper  a  tender,  because  to  do  so  would  impair  the  obligation  of  con- 
.' tracts,  by  authorizing  payment  in  a  less  valuable  medium,  is  untenable. 
The  fallacy  of  that  argument  is  further  illustrated  by  supposing  that  A, 
being  indebted  to  B,  has,  in  his  possession,  corn,  wheat,  sugar,  beeves,  iron, 
or  any  other  articles ,  liable  to  be  taken  for  the  public  use,  and  upon  the 
sale  of  which  he  relies  to  obtain  the  means  of  paying  the  debt  due  to  B  j 
yet,  the  Government  sends  an  agent  who  forcibly  takes  A's  property,  and 
compels  him  to  take  Treasury  Notes  in  payment.  If  the  Treasury  Notes  are 
a  legal  tender,  they  can  be  used  to  pay  A's  debt  to  B  ;  but  if  not  a  tender, 
and  Congress  has  no  power-.to  make  them  so,  upon  what  principle  can  the 
seizure  of  the  property  of  A  be  justified?  If  it  be  "necessary  and 
proper"  to  pay  A  in  Treasury  Notes,- which  I  maintain  it  is,  certainly  it  is 
also  "necessary  and  proper"  to  enable  A  to  pay  his  debt  in  the  same 
money  which  the  Congress  have  compelled  him  to  receive,  for  the  very 
purpose  of  the  Constitution  was  to  "establish  justice;"  and,  surely,  it  is 
not  justice  if  the  Government  deprives  A  of  the  means  of  payment,  and 
at  the  same  time  arms  B  with  the  power  of  the  law  to  enforce  it.  The 
promise  of  A  would  be  to  pay  in  dollars ;  Congress  has  authorized  the 
issue  of  paper  dollars,  and  compels  the  public  creditors  to  receive  them  in 
payment.  And  why  do  we  permit  Congress  to  do  this  ?  Is  it  not  because 
it  is  "necessary  and  proper'  for  carrying  into  execution"  the  powers 
"vested  by  the  Constitution  in  the  Government  of  the  Confederate 
States  ?"•  If  Congress  has  power  to  issue  and  compel  the  creditors  to  re- 
ceive, in  payment,  a  depreciated  paper  money,  surely  Congress  may  pass 
laws  making  it  a  tender  to  the  creditors  of  those  who  have  been  coerced  by 
the  Government  to  receive  it.j  and  especially  it  the  effect  will  be  to  greatly 
increase  its  value  when  it  is  used  by  the  Government. 


CAN  CONGRESS  REGULATE  THE  VALUE  OF  A  METALLIC  OR  A. 
PAPER  CURRENCY  CONVERTIBLE  INTO  GOLD? 

It  is  the  duty  of  Congress  to  regulate  the  value  of  money.  Can  Congress 
regulate  the  value  of  gold  or  silver?  How,  and  by.  what  standard,  will  they 
measure  their  value?  Sir  William  Petty  said  that  the  day's  food  of  an  adult 
man,  and  not  the  day's  labor,  is  the  common  measure  of  the  value  of  silver; 
John  Taylor,  Jr.,  says  that  the  corn  consumed  in  the  production  ;  and  Adam- 
Smith  and  Ricardo,  and  the  Edinburgh  Review,  say  that  the  labor  requisite 
to  produce  them  is  the  proper  measure. of  the  value  of  the  precious  metal*. 
If  the  value  of  gold  depends  upon  the  value  of  the  day's  food,  or  of  the  corn 
consumed,  or  of  the  labor  expended  in  producing  it,  it  follows  that  the  value 
of  gold  must  fluctuate  as  the  value  of  the  food,  the  corn,  or  the  labor  used  in  > 
producing  it  may  fluctuate.  Chivalier  says  :  "  If  there  be  anything  confirmed 
by  history,  it  is  that  the  efforts  of  Government  are  powerless  to  regulate  the 


36 

value  of  gold  and  silver  in  relation  to  other  commodities."  If  Congress  cannot 
regulate  the  value  of  gold  and  silver,  it  is  manifest  that  they  cannot  regulate 
the  value  of  specie  or  of  a  paper  money  convertible  into  specie.  If  Congress 
cannot  regulate  the  value  of  a  metallic  currency,  because  they' cannot  regulate 
the  cost  of  gold  and  silver,  the  power  ;to  regulate  its  value  is  rendered  more 
difficult  by  the  fact  that,  inasmuch  as  the  precious  metals  are  of  universal  use 
among  all  civilized  nations,  and  are  easily  exported  from  one  nation  to  any 
other,  the  value  of  metallic  money  in  the  Confederate  States  will  be  regulated 
by  the  contingencies  which  may  effect  its. value  in  the  foreign  markets;  which 
value  will  be  determined  by  circumstances,  over  which  our  Congress  can  ex- 
ercise no  control.  This  is  further  illustrated  by  the  annexed  diagrams — for 
the  two  first  of  which  I  &w  indebted  to  Mr.  Edward  Hazlewood,  of  London, 
and  for  the  other  to  Gibbon's  work  on  the  Banks  and  Banking  in  New  York  i 

T>  I  .A,  GS-  :e,  -A.  2VE 

Showing  the  Fluctuations  in  the  'rate  of  interest  charged  by  the  Bank  of  England,  as  regulated  by  the 
Amount  of  Bullion  in  its  vaults,  the  figures  in  the  margin  representing  the  Bullion  in  million* 
of  dollars  (from  $35,000,000  to  $100,000,000),  and  the  irregular  lines  indicating  the  rates  oj 
interest. 


37 


DIAGRAM 


owing  the  Fluctuations  of  the  Amount  of  Notes  issued  by,  and  of  the  Liabilities  of  the  Bank  of 
England,  for  ten  years,  from  1844  to  1854. 


I  »  ■ 

DOLLARS         lg44        1845       1846       1847       1848        1849       1830       1851         1852       1853 


38 

The  second  represents  the  liabilities  and  the  issues  of  the  Bank  of  England 
from  1844  to  1858,  inclusive,  the  horizontal  lines  each  representing  five 
millions  of  dollars.  Thus,  in  1844,  the  issues  of  the  bank  were  less  than 
one  hundred  and  forty  millions  of  dollars,  and,  in  1847,  they  were  less 
than  one  hundred  and  ten  millions;;  and  yet,  in  1852,  they  were  one  hun- 
dred and  eighty.  ( Now,  as  the  effect  of  an  over  issue  of  a  paper,  converti- 
ble into  specie,  is  ■  to  depreciate  the  value  of  the  whole  currency,  gold  as 
well  as  paper,  and  consequently  to  cause  the  gold  to  be  exported,  inasmuch 
as  the  issues  of  the  Bank  of  England  are  regulated  by  the  quantity  of  spe- 
cie in  its  vaults,  it  is  obvious  that  the  regulation,  which  requires  the  Bank 
to  reduce  its  issues  under  an  unfavorable' foreign  exchange,  >and  allows  an 
increased  issue  of  bank  notes  when  the  exchange  is  favorable,  must,  of  ne 
cessity,  create  that  fluctuation  in  the  value  of  money  and  depreciation  in 
the  values  of  property  which  characterizes  the  history  of  British  banking 
and  finance. 

The  pretence  of  those  who  manage  the  Bank  is,  that  they  prefer  a  paper 
convertible  into  specie,  because  it  is  more  stable  in  value  than  an  incon- 
vertible paper  would  be.  By  reference  to  the  first  diagram,  it  will  be 
seen  that  the  figures  on  the  margin  represent  the  years,  and  the  slims  of 
bullion  in  the  Bank;  the  perpendicular  lines  the  months,  and  the  horizon- 
tal lines  indicating  each  five  millions  of  dollars.  The  irregular  lines  repre- 
sent the  fluctuations  in  the  quantity  of  specie  in  the  Bank,  whilst  the 
figures  on  these  lines  represent  the  fluctuations  in  the  rates  of  interest 
charged  by  the  Bank.  Thus,  in  January,  1852,  the  bullion  in  the  Bank 
was  eighty-five  millions,  and  in  February,  interest  was  2£  per  cent.;  in 
June,  the  bullion  was  more  than  one  hundred  millions,  and  interest  was 
but  two  per  cent.,  whilst  in  January,  1857,  there  was  in  the  Bauk  say 
forty-six  millions,  and  interest  was,  in  March,  6£  per  cent.  The  'bullioe 
rose,  in  July,  to  fifty-seven  millions,  and  interest  was  5£  per  cent.  It  con- 
tinued at  the  same  level  until  October,  and  interest  was  5  per  cent.;  from 
October  1st  to  10th  December,  it  ran  down  to  thirty-five  millions,  and  in- 
terest rose  to  6£,  8,  9  and  10  j>er  cent.  The  effect  of  the  severe  pressure 
for  gold  in  London  was  a  universal  panic  throughout  the  commercial  world, 
forcing  a  current  of  gold  toward  the  great  commercial  centres  of  London, 
Paris,  Vienna  and  Hamburg.  The  aceumulation  at  these  centres  was 
greatly  beyond  the  sum  requisite  to  maintain  the  proper  specie  level.  This 
is  forcibly  illustrated  by  the  table  given  on  page  14,  and  by  the  third  dia- 
gram, for  which  I  am  indebted  to  Gibbon's  work  on  the  "Banks  and  Banking 
in  New  York." 

I  have  explained  that  the  effect  of  this  contraction  and  expansion  of  the 
specie  and.  circulation  of  the  Bank  of  England,  instead  of  giving  uniform- 
ity and  stability  to  the  monetary  system  of  England,  is  to  cause  the  most 
ruinous  fluctuation  in  the  values  of  money  and  of  property,  not  only  in 
Englaud,  but  in  all  other  countries  having  a  metallic  or  convertible  paper 
currency,  and  having  extensive  commercial  relations  with  England.  The 
diagrams  and  statistics,  taken  from  Gibbon's  very  valuable  work,  show  that, 
whilst  the  pressure  of  th^  Bank  screw  in  London  compelled  the  Banks  cf 
New  York  to  so  diminish  their  discounts  as  to  cause  unexampled  pecuniary 


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39 

losses  and  distress,  the  ultimate  effect  was  to  accumulate  in.  the  Banks  of 
New  York,  by  force  of  the  reaction,  more  than  three  times  the  sum,  in 
specie,  requisite  to  maintain  the  value  of  the  credit  and  circulation  of  the 
Banks  6%  New  York  on  a' par  with  specie— demonstrating,  beyond  question, 
that  the  credit  of  the  Banks  of  New  York  does  not  depend  upon  the  specie 
in  their  vaults,  but  upon  the  securities,  consisting  of  mortgages  on  real 
estate,  and  the  bonds  of  the  State  and  of  the  United  States,  deposited  with 
the  State  as  collateral  security  for  the  payment  of  their  notes,  and  upon  the 
solvency  of  those  who  deal  with  the  banks,  and  use  the  credit  and  circula- 
tion of  the  banks  in  their  purchases  and  payments. 

The  operation  of  the  financial  system,  predicated  on  a  metallic  basis,  is 
this:  England,  by  the  magnitude  and  expansion  of  her  commerce,  can 
create  balances  in  her  favor  in  most  of  all  other  countries  with  whom  she 
trades.  By  refusing  to  renew  her  discount  of  commercial  paper,  and  by 
the  sale  of  exchequer  bills,  the  Bank  of  England  can  render  money  so 
much  dearer  in  London,  than  it  may  be  elsewhere,  as  to  coerce  the  greater 
part  of  the  balances  to  be  paid  in  specie.  Thus  say  that  th,e  commercial 
balances  due  to  England  are  $100,000,000,  and  the  demand,  for  specie  in 
payment,  brings  to  London  eighty  millions  of  dollars,  of  which  fifty  mil- 
lions are  an  excess  beyond  the  sum  required  to  reduce  the  value  of  money 
in  England  to  the  "  prope?  level,"  the  extra  demand  having  put  the  pre- 
cious metals  of  all  other  countries  in  motion  towards  London,  would  create 
an  excess  greatly  beyond  the  wants  of  Loudon.  The  bank,  which  but  yes- 
terday demanded  ten  per  cent.,  and  refused  to'  discount  the  best  commer- 
cial paper,  even  at  that  rate,  to  day  will  be  in  the  market,  seeking  invest- 
ment at  two  per  cent. ! !  Is  it  surprising  that  those  who  regulate  the  foreign 
exchange,  and  make  untold  profits  by  the  movement  of  specie,,  insist  upon 
a  specie  basis  ? 

It  will  be  impossible  to  create  such  a  demand  for  money  under  the 
system  which  I  propose.  The  certificates  of  our  Government,  made  a  legal 
tender  here,  will  not  be  a  tender  in  London.  They  will  be  money  here, 
but,  as  they  will  not  be  money  in  London,  they  cannot  be  exported  to  Lon- 
don. With  us  they  may  be  made  equal  to  gold  for  the  purchase  of  our 
exports,  and  through  our  exports  we  can  command  whatever  we  may  de- 
fcire  of  foreign  merchandise.  Whilst  the  large  sum  of  the  public  debt  will, 
as  I  have  said,  become  the  basis  of  bank  issues,  the  payment  of  which, 
being  secured  by  the  convertible  bonds  of  the  Confederate  States,  will,  at 
no  time,  be  affected  or  depreciated  by  a  foreign  demand  for  specie.  In  that 
case,  speeie,  like  cotton,  will  be  a  commodity,  the  value  of  which  will  de- 
pend upon  the  demand  for  it.  If  we  wish  to  obtain  foreign  exchange  to 
pay  for  British  goods,  and  the  British  merchants,  or  the  British  bankers, 
or  their  ascents,  refuse  to  take  our  Treasury  certificates  in  payment,  we  must 
give,  in  exchange  for  it,  our  cotton,  or  some  other  exportable  commodity 
whieh  we  can  purchase  with  our  Treasury  certificates,  or  with  our.  bank 
notes,  predicated  upon  the  bonds  which  represent  the  certificates  that  have 
been  funded.  If  the  British  gold  is  worth  more  than  our  certificates,  then 
we  must  demand  so  much  the  more  for  our  cotton,  if  payable  in  our  cur- 
rency.    We  must  l'egulate  the  value  of  our  surplus  produce  by  the  relative 


40 

value  of  our  currency,  ^he.  value  of  gold,  as  compared  with  silver,  is  as 
fifteen  to  one ;  yet,  with  us,  silver  is  a  legal  tender,  although  it  is  not  a 
tender,  but  as  small  change,  in  England.  If  we  can  so  regulate  the  value 
of  our  paper  money  as  to  make  it  equal  to  silver  in  the  purchase  of  foreign 
exchange,  then  all  that  we  have  to  do  is  to  so  regulate  the  price  of  all 
other  commodities  that  their  price,  if  sold  for  our  paper  money,  will  com- 
mand the  same  amount  of  foreign  exchange  as  if  they  were  sold  for  silver 
or  gold.  If  the  price  of  gold  be  twice  the  value  of  our  paper,  then  our 
cotton  should  bring  twice  the  price  in  our  paper  money  as  if  sold  for  gold. 
If  we  make  the  paper  money  a  tender,  and  regulate  the  quantity,  in  circu- 
lation, by  a  proper  system  of  taxing  and  funding  it,'we  can  make  it  of  equal 
value  as  gold  in  the  payment  of  debts  and  the  purchase  of  property,  in' 
eluding  foreign  exchange. 

Such  paper  money  will  be  worth  more  than  specie,  as  I  now  pro 
eeed  to  demonstrate.  By  the  report  of  the  Secretary  of  the  Treasury  of 
thg  United  States,  there  were  in  the  banks  in  the  non  slaveholding  States, 
in  1860,  $44,662,408  of  specie,  and  in  the  banks  of  the  slaveholding 
States,  $38,912,129.  This  sum  was  held  by  the  banks  to  enable  them  to 
-redeem  their  circulation,  which,  in  the  Northern  States,  was  $119,997,469, 
and  in  the  slaveholding  States,  $87,107,108.  It  paid,  no  interest,  and,  to 
use  the  words  of  Adam  Smith,  was  so  much  dead  capital.  What  the  sum  held 
by  individuals  was,  I  have  no  sufficient  data  to  state,  except  that  the  coin- 
■  age  in  the  United  States,  from  1850  to  1856  inclusive,  adding  six  months 
of  1857,  was  $415,226,717.74,  of  which  there  were  exported  $285,881,176, 
leaving  $129,345,541.74.  Now,  if  we  assume  that  the  interest,  upon  the 
specie  held  by  the  banks  and  the  public  in  the  Confederate  States,  is  but 
ten  millions  ($10,000,000)  per  annum,  and  that  that  sum  was  substituted, 
by  the  public  and  the  banks,  by  the  six  per  cent,  convertible  bonds,  as  I 
propose,  the  saving  to  the  banks  and  to  the  public,  holding  specie,  would, 
in  forty  years,  be  $1,660,285,359.  j8^--  and  yet,  great  as  this  saving  would 
be,  it  is,  as  it  were,  small,  very  small  indeed,  as  compared  to  the  effect 
which  the  increased  stimulus  given  to  the  productive  industry  of  the  coun- 
try would  be,  and  to  the  saving  in  the  expenditures  and  taxes  of  the  Gov- 
ernment of  the  Confederacy  and  of  the  several  States.  The  States  cannot 
make  their  Treasury  Notes  a  legal  tender,  but  they  can  issue  their  certifi- 
cates, fundable  in  six  per  cent,  convertible  bonds,  and  authorize  the  sus- 
pension of  specie  payments  by  their  banks,  if  the  holders  of  bank  notes 
refuse  to  receive  the  fundable  certificates  of  the  State  or  of  the  Confede- 
rate States  in  payment,  upon  condition  that  the  banks  have  deposited,  with 
the  Treasurer  of  the  State,  the  convertible  bonds  of  the  State  or  of  the 
Confederate  States,  to  be  held  in  trust  for  the  payment  of. their  notes.  Ir 
such  case,  the  holders  of  the  notes  will  know  that  the  banks  cannot  fail ; 
and,  unless"  the  value  of  the  money  be  less  than  the  interest  paid  upon  the 
bonds,  the  v'dtes  will  not  be  presented  for  payment,  and  the  value  of  the 
currency,  will  be  as  uniform  as  the  rate  of  interest  paid  upon  the  bonds. 
As  tb  _e  will  be  no  apprehension  of  their  failure,  there  will  be  no  induce 
ment  to  run  upon  the  banks;  and,  as  money  would  be  abundant  and  cheap, 
the  greater  part  of  the  surplus  capital  of  the  whole  country  would  be  in- 
vested in  public  securities  or  in  banks,  whose  profits  would  consist  chiefly 


41 

in  the  circulation  of  their  own  notes.  And,  as  under  such  a  system,  there 
would  be  no  sudden  or  ruinous  contraction  of  the  currency — no  sudden  or 
ruinous  depreciation  of  the  values  of  property,  it  would  be  the  business  of 
our  banks  to  stimulate  the  energies,  industry  and  enterprise  of  our  people, 
by  an  advance  of  the  requisite  capital,  whenever  the  previous  habits  and 
character  of  the*  applicant,  sustained  bythe  requisite  security,  would  justify 
it.  This  is  not  theory.  The  principle  has  been  fully  tested  in  Scotland. 
I  refer  to  the  comment  of  the  London  Quarterly  Review  for  March,  1830, 
upon  the  Report  of  the  select  committee  on  promissory  notes  in  Scotland 
and  Ireland  in  1826,  and  give  the  following  extracts  upon 

SCOTCH   BANKING.      . 

If,  however,  the  privilege  of  issuing-  negotiable  notes  was  granted  to  banks  only  on 
terms  which  would'  remove  all  doubt  from  the  public  mind  as  to  the  solvency  of  these 
establishments,  a  run  never  would  practically  take  place.  The  holders  of  the?e  notes, 
knowing  that  they  ran  no  possible  risk  of  loss,  would  be  no  more  disposed  to  rush  with 
them  into  the  different  banks,  to  be  converted  into  cash,  than  to  run  with  a  sovereign 
into  the  mint  to  have  it  exchanged  for  bullion.  The  cause  of  every  run  upon  banting  es- 
tablishments is  the  fear  which,  from  whatever  unforeseen  cause,  seizes  the  public  mind 
that  they  may  not  be  solvent.  Let  the  ground  of  this  fear  be  effectually  removed; 
assurethe  public  mind  that,  as  fai,  at  least,  as  concerns  the  notes  circulated  by  a  bank- 
ing establishment,  it  cannot  prove  insolvent,  and  these  runs  will  never  take  place. 

That  a  system  of  banking  might  be  organized  in  this  country,  (England)^  which 
would  practically  remove  every  danger  and  inconvenience  attendant  upon  the  issue  of 
one  pound  notes," is  a  fact  capable  of  being  demonstrated  by  the  evidence  of  actual  ex- 
perience. It  has  already'been  put  to  the  test  in  one  part  of  His  Majesty's  dominions, 
and  has  been  found  to  stand  its  ground,  unaffected  by  the  violent  and  sudden  fluctua- 
tions which,  at  various  periods,  have  taken  place  in  the  transactions  of  trade  and  com- 
merce  We  need  not  tell  our  readers  that  we  allude  to  Scotland,  where  the  circulating 
medium  (with  the  exception  of  silver  for  change)  consists  wholly  of  paper,  and  where  a 
sovereign,  as,a  current  coin,  is  rarely  ever  seen.'  But,  although  it  be  well  known  that  paper 
money  forms  the  whole  circulating  medium  of  Scotland,  we  are  inclined  to  suspect  that 
the  principles  of  the  banking  system  of  our  Northern  neighbors  are  not  generally  under- 
stood, or,  at  least,  generally  appreciated  in  this  part  of  the  empire.  Nothing  but  the 
want  of  adequate  information,  as  to  this  subject,  could  have  led  to  the  attempt  which 
was  made,  in  1826,  to  meddle  with  the  banking  system  of  Scotland,  and  deprive  the  in- 
habitants of  that  country  of  institutions,  under  the  protection  ot  which  they  had  reached, 
and  continued  to  enjoy,  a  high  degree  of  public  as  well  as  private  prosperity.  Our 
wary  neighbors,  however,  led  on  by  the  redoubted  Malagrowther  (Sir  Walter  Scott), 
successfully  resisted  the  attempts  of  the  Treasury  to  force  upon  them  the  u?e  of  a  me- 
tallic circulating  medium,  and,  by  that  means,  secured  themselves  (in  as  far  a3  the  inti- 
mate connexion  of  the  two  countries  could  permit)  against  the  difficulties  and  inconve- 
niences which  the  change,  effected  at  that  period,  in  our  monetary  system,  has  entailed 
upon  this  part  of  the  Island.  An  impression  prevails  very  generally,  <  n  this  side  of  the 
Tweed,  that  the  superior  stability  of  the  Scottish  Banking  system  rests  upon  the  pro- 
verbial sagacity  and  wariness  of  the  inhabitants  of  Scotland,  and  not  upon  any  pecu- 
liarity inherent  in  the  system  itself.  From  this  it  is  inferred  that  a  circulating  me- 
dium, which  has  been  found  safe  among  our  Northern  neighbors,  would  be  attended  with 
danger  and  insecurity,  if  adopted  here.  This,  however,  appears  to  us  a  mistake.  The 
security  of  Scottish  banking  arises  from  the  general  pringiples  on  which  the  system  has 
been  organized,  and  not  from  anything  which  is  peculiar  either  to  the  character  or  the 
habits  of  those  by  whom  its  operations  are  conducted.  If  adopted  elsewhere,  these 
principles, would,  we  feel  persuaded,  be  attended  with  similar  results:  hence  it  becomes 
important  to  point  out  their  n  ture  and  trace  their  effects. 

*  *  Even  in  times  of  commercial  panic  and  confusion,  the  inhabitants  of  Scotland 
never,  for  a  single  moment,  harbor  the  suspicion  that  their  principal  banks  can,  by  possi- 
bility, fail.  *  *  *  The  principles  on  which  the  banks  are  established  place  their 
solvency  beyond  all  doubt.    All  the  banks  which  issue  note?  are  joint  stock  companies, 


42 

consisting  of  a  great  number  of  partners,  and  possessing  a  large  capital,  not  merely 
subscribed,  but  actually  paid  up,  and  invested  in  mortgages  or  in  Government  securi- 
ties. This  fund  is  always  ready  to  cover  any  losses  which  the  bank  maj'  sustain  in  it* 
transactions.  ******  This  is  in  ..truth  the  foundation  of  the  unlipfited 
credit  enjoyed  by  the  Scotch  banks;  it  is  the  basis  of  that  undoubting  confidence  winch 
the  public  repose  in  their  stability.  The  public  confidence  does  not  rest  upon  the  credit, 
the  discretion  or  the  integj-ity  of  the  directors  ;  it  has  a  much  more  stable  foundation 
for  its  support ;  it  is  based  upon  actual  capital  which  can  neither  be  withdrawn  nor  di- 
minished without  the  knowledge  of  the  public. 

In  that  country,  as  we  have  said,  a  sovereign  is  seldom' seen,  except  in  the  card  case 
of  an  old  maid,  or  the  cabinet  of  some  recluse  virtuoso.     One  of  the  witnesses  says; 

There  is  a  prejudice  against  gold  in  Scotland.  This  prejudice  is  simply  on  account 
of  the  trouble  attending  it :  it  is  weighed  ;  when  it  is  found  light,  the  people  refuse  it ; 
the  country  people  are  afraid  to  touch  it.  There  is  not  a  district  in  Scotland  but  where, 
if  you  were  endeavoring  to  pass  a  sovereign,  they  would  say,  if  you  had  a  note  of  any 
bank  in  Scotland  they  would  prefer  it. 

.There  i-<,  no  doubt,  a  small  quantity  of  gold  in  the  coffers  of  the  different  bankers, 
in  order  to  meet  the  occasional  whim  of  some  capricious  customer ;  but  that  a  bank 
should  be  asked  to  give  gold  in  exchange  for  notes  is  an  event  which  happens  so  rarely, 
that  a  very  trifling  sum,  indeed,  is  found  fully  adequate  to  meet  all  demands  of  this 
kind 

"  Although,"  says  a  witness,  examined  before  the  committee,  "  I  have  been  for  ten 
years  in  an  office  tiiat,  perhaps,  does  more  business  than  any  other  individual  office  in 
Scotland,  or  out  of  London,  1  can  state,  as  my  experience,  that  1  have  never  refused  gold 
to  any  person  that  wished  it.  They  only  a*k  it  when  they  have  occasion  to  j^o  to 
Ireland  or  to  England,  or  to  emigrate  to  America.  I  could  state  it  as  a  fact  that  ten 
thousand  sovere  gns  would  have  supplied  all  the  demands  for  the  ten  years  1  have 
been  in  Glasgow."  "The  rottenness  ami  insecurity  of  the  Engji-h  system  of  banking 
are  known  to  aggravate  very  greatly  the  effects  of  the  pmics  to  which  all  bodies, 
trading  upon  cie'dit,  are  unavoidably  subject.  The  general  distrust  prevailing  at. such 
periods  is  particularly  directed  toward  the  English  banks,  which  are  sure  to  be  the 
first  to  feel  the  raging  of  the  storm.  The  weakest  of  these  fail,  and  this  adds  fuel  to 
the  flame  which  had  already  burs,t  forth.  A  partial  want  of  confidence  is- thus  speedily 
converted  into  a  general  panic,  and  all  banks,  whatever  may  be  their  opulence  and 
character,  suffer  more  or  less  from  the  consequences.  Even  banks,  upon  which  no  actual 
run  takes  place,  sustain  great  losses  during  these  seasons.  Uncertain  of  the  direction 
which  the  tempest  may  take,  they  are  all  compelled  to  make  preparations  to  meet  it* 
violence,  and  the  sacrifice  of  property  required  for  this  purpose  has  frequently  been 
enormous.  The  faintest  whisper  or  the  most  trifling  accident,  often  proves  sufficient  to 
inflict  incalculable  losses  on  English  Banks.  *  *  *  *  *  The  bankers  of  Scotland 
do  not,  like  those  of  England,  derive  their  profits  from  the  employment  of  floating  bal- 
ances left  in  their  hands  without  interest  by  those  who  deal  with  them.  On  the  con- 
trary, they  allow  interest  for  every  pound  of  capital  deposited  in  their  hand  ;  this  in- 
terest is  always  less  by  one  per  cent. /than  that  which  they  charge  upon  the  loans  ad- 
vanced to  borrowers;  and  the  difference  between  the  interest  paid  and  that  charged 
upon  the  whole  of  the  capital  entrusted  to  their  management,  forms  the  only  source 
whence  the  profits  of  Scotch  banking  accrue."  * 

"  My  this  practice,  allowing  interest  upon  all  deposits,  these  banks  attract  every  shil- 
ling of  unemployed  capital  which  any  inhabitant  may  happen  to  possess.  ri he  wit- 
nesses, who  were  examined  by  the  committee  of  182*,  estimated  the  average  of  these 
deposits  at  about  twenty  millions  sterling.  Persons  possessed  of  small  capitals  in  Scot- 
land never  purchase  into  the  public  funds;  having  the  most  unbounded  confidence  in  the 
solidity  of  their  own  banks,  they  universally  deposit  in  these  establishments  all  the 
capital  which  they  can  spare  *  *  *  *  Their  general  rule  is  to  allow  intere>t  upon 
every  deposit,  however  small  may  be  its  amount.  One  of  the  witnesses  examined  by 
the  committee,  and  thoroughly  conversant  with  the  subject,  states  that,  in  towns  li^e 
Glasgow,  a  very  large  proportion  of  the  deposits  come  from  the  laboring  classes.  In 
country  places,  like  Perth  or  Aberdeen,  it  is  from  servants  and  fishermen,  and  just  the 
class  of  the  community  who  save  from  their  earnings,  in  mere  trifles,  small  sums,  till 


43 

they  reach  a  sufficient  amount  to  form  a  bank  deposit.    *     *    *     A  great  part  of  the 
depositors  are  of  this  description." 

Another  witness  examined  touching  the  same  point,  estimates  the  whole  bank  de- 
posits at  twenty  millions  sterling  ($100,000,000),  and  the  proportion  of  the  simll  de- 
posits as  fully  equal  to  one-half  the  whole.  He  then  adds  :  "  I  have  had  many  oppor- 
tunities, both  professionally  and  in  various  situations  in  which  I  have  been  placed,  of  ob- 
serving the  effects1  of  those  deposits ;  and  I  do  think  that  the  system  of  the  Scotch  . 
banks, -allowing  the  rates  of  interest  which  they  have  done,  upon  these  small  deposits, 
has  influenced  very  considerably  the  mqral  character  of  the  people.  The  deposit  is  sel- 
dom drawn  out  until  the  depositor  has  to  build  a  cottage  or  to  buy  a  house  ;  or  perhaps 
he  himself  begin  budsess,  or  set  out  his  eldest  son  in  the  world  ;  or,  it  may  be,  furnish 
a  house  for  his  daughter  at  her  marriage.  A  deposit  is  often  laid  up  for  old  age  ;  and, 
in  many  instances,  I  have  no  doubt,  has  likewise  been  the  means  of  enabling  men  in  the 
humble  class  of  society  to  give  their  children  what  we  in  Scotland  value  above  all  the 
advantages  of  wealth — the  benefit  of  an  intellectual  and  religions  education." 

"  In  truth,  nothing  can  be  conceived  more  admirably  adapted.to  encou  age  industry 
and  economy  than  the  system  of  banking  which  has  been  so  long  in  full  operation  in 
Scotland;,  and  we  have'  no  doubt  that  the  saving  and  persevering  disposition,  which 
forms  a  prominent  feature  in  the  character  of  our  Northern  neighbors,  must  be  ascribed, 
in  a  considerable  degree,  to  the  habits  instilled  into  them  by  these  valuable  institutions. 
The  industrious  laborer  finds,  at  his  own  door,  a  safe  and  profitable  receptacle  for  every 
shilling  he  can  save.  Without  trouble,  anxiety,  or  loss  of  time,  he  takes  his  pound  to 
the  bank,  where  it  bears  interest  from  the  moment  in  which  it  is  deposited.  The  banks 
thus  constitute  public  depositories,  in  which  every  shilling  that  can  be  spared,  'through- 
out e\r£rv  district  of  Scotland,  finds  its  place."  "  Nor  is  the  disposal  of  the  aggregate 
capital  thus  collected  less  beneficial  in  its  effects,  upon  the  habits  and  enterprise  of  the 
people,  than  the  economy  by  which  it  is  saved.  The  bank  reservoirs,  thus  kept  con- 
stantly full,  furnish  every  person  of  character"  and  enterprise  with  a  ready,  certain,  and 
never  failing  supply  of  capital,  wherewith  to  embark  in  any  undertaking  which  holds 
out  the  reasonable  probability  of  success.  The  managers  of  the  different  banks,  having 
collected  into  one  ficus  the  whole  capital  of  the  country,  offer  every  facility  to  those 
who  wish  to  borrow  this  capital,  and  turn  it  to  profitable  account.  Their  profit  is  de- 
rived exclusively  from  this  source.  Upon  all  the  capital  which  may  be  unemployed  in 
the  coffers  of  these  banks  a  dead  loss  is  sustained  :  hence  they  are  eager  to  find  out  saf«s 
borrowers  as  saving  depositors." 

The  bankers  of  Scotland  are,  in  fact,  dealers  in  unemployed  capital. 
They  form  an  open  and  universally  known  channel  of  communication  be- 
tween the  borrower  and  the  lender  in  the  money  market.  They  acquire  a 
perfect  knowledge  of  both  parties.  They  borrow  money  of  those  who  have 
it  to  lend,  and  lend  money  to  those  who  want  to  borrow,  and  charge  a 
profit  of  one  per  cent,  upon  all  cash  transactions  for  the  use  of  their  own 
credit,  labor  and  skill.  Any  person,  opening  an  account  with  the  Scotch 
banks,  receives  four  per  cent,  (or  some  other  amount  less  by  one  per  cent, 
than  the  average  rate  of  interest)  upon  the  balance  left  in  their  hands. 
He  may  pay  in  mobey  whatever  he  chooses.  This  is  carried  to  the  credit 
of  his  account,  and  interest  is  allowed  for  it  from  the  day  on  which  it  is 
deposited  He  may  draw  his  money  out  when  and  in  what  sums  he  thinks 
proper,  and  his  loss  of  interest  on  the  sums  so  drawn  out  commences  only 
from  the  day  on  which  it  is  received.  Their  object,  however,  in  borrowing 
capital,  is  to  make  a  profit  by  lending  it :  hence  the  facilities  which  they 
give  to  borrowers  are  as  great  as  they  can  be  consistently  with  safety.  In 
the  first  place,  they  will  discount  bills  and  other  mercantile  securities, 
which  are  perfectly  regular  and  good,  at  all  times  and  to  any  amount.  This 
is  an  incalculable  advantage  to  the  merchants  of  Scotland.     They  know 


44 

that  they  can  fail  of  success  only  through  their  own  rashness  or  miscalcu- 
lation— never  from  any  sudden  withdrawal.,  of  that  accommodation  which 
had  originally  stimulated  their  enterprise.  The  inconvenience  felt  by  the  . 
merchants  of  Scotland,  during  times  of  panic,  arise  exclusively  from  their 
transactions  with  England,  where  the  storm,  whenever  it  happens,  rages 
with  destructive  violence. 

A  second  mode  of  lending,  practiced  by  the  Scotch  bankers,  is  to  grant 
what  is  called  a  cash  credit  to  any  industrious  person  desirous  to  borrow 
capital,  to  be  embarked  in  any  species  of  profitable  employment.  When  a 
person  applies  for  a  cash  account,  which  is  not  an  immediate  advance  of 
money  on  the  part  of  the  bank,  but  a  conferring  of  the  power  of  drawing 
upon  the  bank  for  a  certain  specified  extent,  he  proposes  two  or  more  securi- 
ties; a  bond  is  made  out,  and  he  draws  as  occasion  requires.  In  this  way 
he  has  never  more  from  the  bank  than  is  absolutely  necessary  for  the  pur- 
poses of  his  business.  The  account  is  never  recalled  unless,  by  having  been 
but  little  operated  upon,  it  has  ceased  to  be  beneficial  to  the  banker  in  the 
circulation  of  his  notes ;  and  interest  is  charged  only  on  the  amount  of  the 
balance  which  may  be  owing  to  the  bank.  These  credits  run  from  so  low 
as  £50  to  £1000,  and  in  some  instances  more.  They  are  granted  to  persons 
of  every  description — to  small  farmers,  who  require  assistance  in  stocking 
their  farms,  or  who  carry  on  a  petty  trade  in  cattle ;  to  shop  keepers,  prin- 
cipally  on  their  commencing  business  :  to  tradesmen  generally;  to  all  sorts 
of  law  agents.  The  beneficial  effects  of  this  system  are  incalculable  with 
regard  both  to  the  interests  of  individuals  and  the  public.  *  *  *  * 
It  is  on  all  hands  agreed  that,  for  the  rapid  advances  which  it  has  for  the 
last  century  made  in  wealth  and  prosperity,  Scotland  is  very  largely,  if  not 
mainly,  indebted  to  her  banking  system. 

I  regret  that  want  of  space  compels  me  to  limit  my  extracts  relative  to 
Scotch  banks,  for  the  system  has  become  so  identified  with  the  progress, 
the  industry,  the  commerce  and  civilization  of  mankind,  that,  in  consider- 
ing the  question  of  currency,  we  should  remember  that  banks  and  bankers 
have  become  an  indispensable  part  of  the  system  of  credits — that  it  is 
their  business  to  deal  in  money  and  in  credit,  and  that,  therefore,  they  are 
an  important  agency  in  the  regulation  of  the  value  of  money.  Hence  the 
necessity  of  a  careful  examination  into  the  history  and  nature  of  banks 
and  banking,  that  we  may 'guard  against  the  defects  of  existing  systems  and 
the  errors  which  have  characterised  their  administration.  Thus  we  see  that 
in  Scotland  and  'New  York  banking  is  free,  yet  the  amount  of  circulation  is 
comparatively  less  than  in  England  and  some  of  the  other  States  where  it 
is  limited  by  severe  penalties  and  restrictions.  We  see,  also,  that,  under 
the  Scotch  system,  the  accommodation  given  to  the  public  is  much  greater 
than  in  England ;  and  yet,  in  the  midst  of  failures  and  bankruptcies  which 
have  characterised  the  British  system,  during  the  panic  of  1826,  when 
more  than   four  hundred   banks  failed  in  England,  there  was  not  a  single 

failure  in  Scotland. 

■ 

I  have  referred  to  the  organization  of  the  Bank  of  the  United  States, 
and  of  the  agency  of  that  bank  in  depleting  the  other  banks  of  specie,  to 
be  remitted  to  London  preparatory  of  the  resumption  of  specie  payment 


45 

by  the  Bank  of  England.     As  the  ultimate  failure  of  the  Bank  of  the 
United   States    was  the   result  of  political  and  financial   combinations,  a 
proper  explanation  of  which  would,  as  I  believe,  furnish  forcible  arguments 
in  support  of  the  measures  I  propose,  I  very  briefly  refer  to  them. 
*  It  is  known  that  Mr.  Clay  and  John  Q.  Adams  were  American   commis- 
sioners at  Ghent,  and  that  the  tenth  article  of  the   treaty  of  peace  bound 
the  United  States  to  co  operate  with  England  in   preventing  the  trade  m 
African  slaves,  which  was  construed  by  -Mr.  Adams  to  include  the  domestic 
as  well  as  the  foreign  slave  trade.     From  Ghent  Mr.  Adams  went  to  Lon- 
don as  the  American  Minister,  where  he  was  in   contact  with  the  leading 
British  Abolitionists.     In  1816,  Mr.  Monroe  appointed  Mr.  Cook,  of  Illi- 
nois, bearer  of  dispatches  notifying  Mr.  Adams  of  his  appointment  as  Sec- 
retary of  State.     I  then  resided  in  Kentucky.     Mr.  Cook  brought  a  letter 
of  introduction,  and  told  me  that,  being  in  delicate  health,  his  purpose,  in 
going  to  Europe,  was  to  try  the  effect  of  a  sea  voyage,  intending,  on  his  re- 
turn, to  remove  to  the  South.     I  saw  him  the  next  year  in  Washington, 
when  he  told  me  that  Mr.  Adams  had  satisfied  him  that  the  migration  to 
the  north  of  the  Ohio  would  be  such   that  the  anti  slavery  party  would 
soon  control  the  political  destiny  of  the  United  States,  and  that,  under  the 
advice  of  Mr.  Adams,  instead  of  going  South  to  live,  he  was  going  back  to 
Illinois  with  a  view  to  come  into  Congress  and  agitate  the  slavery  question. 
He*said  that  he  had  already  commenced  the  agitation,   and  gave  me  a 
pamphlet,  containing  a  series  of  letters,  written  b^  him,  addressed  to  Mr. 
Monroe,  under  the  signature  of  D.  P.  C,  which  had  been  published  in 
Meade's  Register,  and  contained  the  text  of  the  slavery  agitation  in  Con- 
gress and  in  the  press  from  the  time  of  the  Missouri  Question  until  now. 
He  did  go  to  Illinois,  was  elected  Jo  Congress,  and  took  a  leading  part  in 
enacting  the  Missouri  restriction.     I  removed  to  Missouri  in   1817.     John 
Scott  was  our  delegate  in  Congress.     I  was  in  the  army  of  1812.     I  was 
sick  at  Vincennes,  where  his  mother  nursed  me  as  if  I  had  been  her  son. 
I  did  not  forget  her  kindness,  and  was  the  intimate,  personal  and  political 
friend  of  her  son.     Peculiar  circumstances  gave  me  a  controlling  influence 
in  the  Western  part  of  the  State,     I  was  a  member  of  the  Convention 
which  adopted  the  State  Constitution,  and  then  of  the  House  of  Represen- 
tatives and  of  the  Senate.     Col.  Benton,  having  been  driven  from  Ten- 
-nessee  by  General  Jackson,  went  to  St.  Louis  and  established  the  St.  Louis 
Enquirer.     Being,  constitutionally,  a  parasite,  he  attached  himself  to  Gov- 
ernor- Clarke.     I   had  been  a  classmate  at  school  of  George  Croghan  and 
John  0.  Fallon,  the  Governor's  nephews,  and  was  received  by  him  with  spe- 
cial favor,  and  was  his  devoted  personal  and  political  friend.     Party  politics 
were  there,  as  in  most  new  countries,  chiefly  personal.     In  the  distribution 
of  offices,  under  the   State  Government,  Mr.  Scott   was  elected  to    the' 
House  of  Representatives  and  Benton   to  the  Senate.     In  1823,  Benton, 
then  a  partisan  of  Mr.  Clay,  came  to  St.  Charles,  where  the  Legislature  was 
in  session,  and  urged  a  caucus  nomination  of  Mr.  Clay  for  the  Presidency. 
I  opposed  the  nomination,  and  it  was  rejected  by  a  nearly  unanimous  vote. 
I,  immediately  after  this,  purchased  the  St.  Louis  Enquirer  and  removed  to 
St.  Louis,  and  took  an  active  part' in   support  of  the  election  of  General 
Jackson.     Col,  Benton  returned  to  Missouri .  from  Washington,  and  qan- 


vassecl  the  State  actively  for  Mr.  Clay.  Wherever  he  went  in  the  State,  her- 
found  the  influence  of  my  paper  counteracting  his  efforts.'  The  vote  of  the 
Southern  District  was  cast  for  the  Jackson  elector;  the  other  two  were 
given  in  favor  of  Mr.  Clay  by  a  small  majority.  Mr.  Clay's  half  brother 
happened  to  be  the  returning  officer  in'  one  of  the  Southern  counties,  rfnei 
refused  to  make  returns.  Mr.  Clay's  partisans  had  taken  the  ground,  in  a 
circular  issued  by  his  Kentucky  committee,  of  which  John  J.  Crittenden 
'  was  a  member,  that  if  the  election  devolved  upon  the  House,  it  would 
there  be  carried  by  "bargain,  intrigue  and  management;"  and  yet,  they- 

,  urged  that,  as  Mr.  Clay  was  popular  in  Congress,  if  returned  as  one  of 
three,  he  would  be  elected. 

The  Legi-lature,  acting  under  the  advice  of  Col.  Benton,  declared  the  elec- 
tion of  electors  illegal,  ami  gave  to  Mr.  Clay  the  threa  electoral  votes  of  Mis- 
souri,  hoping   to    secure    his    election   by  Congress.     Jackson,  Adams   and 

'  Crawford,  to  the  exclusion  of  Mr.  Clay,  were  returned  to  the  House  of  Repre- 
sentatives, and  Mr.  Adams  was  elected  by  -the  votes  of  Mr.  Clay,  Mr.  Scott, 
of  Missouri,  and  Mr.  Cook,  of  Illinois. 

It  so  happened  that,  as  the  attorney  for  persons  having  large  claims  against 
the  Government,  I  reached  Washington  a  few  days  after  the  election  of  Mr. 
Adams.'  One  of  my  family  relative*  and  J.  Q  Adams  had  married  sisters. 
Mr.  Cook  had  married  my  niece ;  and  inasmuch  as  Mr.  Clay  had  been  assailed 
for  his  vote  for  Mr.  Adams,. it  was  deemed  important  to  s-ecure  the  inifnenee 
of  my  paper  in  his  support,  and  my  nephew,  Mr.  Cook,  and  my^  friend,  Mr. 
Scott,  were  selected  to  make  the  arrangement — Col.  Benton  having  availed 
himself  of  the  e  ection  of  Mr.  Adams  to  go  over  to  the  support  of  General 
Jackson  as  a  means  of  identifying  himself  with  the  party  which  I  had  or- 
ganized in- the  State.  They  rolled  up  the  curtain  of  their  future;  thev  ten- 
dered me  the  support  of  the'  Government  as  a  candidate  for  the  United  States 
Senate,  in  opposition  to  Mr.  Benton,  with  a  controlling  influence  over  the 
Federal  patronage  in  the  State. 

I  saw  that  the  purpose  of  the  coalition  was  to  create  a  sectional  partvin 
the  North,  for  the  purpose  of  governing  and  controlling  the  Union.  Mr. 
Adams,  relying  upon  the  anti-slavery  element,  and  Mr.  Clay,  standing  astride 
of  the  Alleghanies,  with  one  foot  on  a  high  tariff  to  enrich  the  v  ankee 
manufacturers,  and  the  other  upon  turnpike  roads  for  the  benefit,  of  the  North- 
west, I  saw  that  the  sinking  fund  of  ten  millions  of  dollars  then  appropriated  to 
"that  object  would,  in  a  few  years,  discharge  the  national  debt ;  and  that,  in-tead 
of  a. system  which  would  increase  the  public  revenue,  creating  a  largesurplus  to 
be  expended  under  appropriations  to  be  made  by  a  corrupt  sectional  majority 
in  Congress,  it  was  indispensable  to  so  modify  the  tariff  as  to  reduce  the  cur- 
rent revenue  to  the  proper  expenditures  of  the  Government.  Instead  of  sup- 
porting the  coalition,  I  purchased  the  Telegraph,  and  removed  to  Washington 
t  i  oppose  them. 

General  Jackson  was  elected.  I  had  made  an  arrangement  with  Amos 
Kendal  to  remove  to  Washington  and  aid  me  as  an  associate  editor.  I  had 
been  a  schoolmate  of  T.  P.  Moore,  of  Kentucky.  He  bad  been  my  active 
friend,  and  had  gained  the  soubriquet  of  "Free  Tom  "  by  aiding  in  the  cir- 
culation of  my  paper.     AfterGen.  Jackson  had  reached  Washington,  Moore 


47  • .: 

requested  me  to  aid  in  obtaining  for  him  . the  appointment  of  Postmaster 
General.  I  refused  to  do  so.  A  few  days  afterward,  Col.  Richard  M.  John- 
son told  me  lhat  the  partisans  of  Martin  Van  Buren  had,  after  consultation, 
determined  to  put  him  in  nomination  for  the  Presidency  in  1832  ;  that  the 
selection  of  the  Cabinet  and  the  important  foreign  missions  had  been  arranged 
with  a  view  to  aid  his  election  ;  and  that,  in  that  consultation,  Moore  had 
told  them  that  he  h  .d  known  me  from  a  boy,  and  that  they  could  not  control 
me  or  my  press  through  the  public  patronage;  and  advised  that,  instead  of 
permitting  Kendal  to  be  my  associate  editor,  they  should  make  him  an 
Auditor,  with  the  understanding  that  he  would  establish  a  Van  Buren  paper 
when  it  became  necessary. 

When  Major  Lewis  brought  me  the  names  of  the  Cabinet,  upon  reading 
them,  I  went  to  Genera!  Jackson  and  told  him  what  I  had  heard  from.  Col. 
Johnson,  and  said  to  him  that  I  was  yet  a  young  man — that  I  had  made  some 
reputation  as  an  editor — that  I  was  then  the 'Printer  to  both  Houses  of  Con- 
gress— t^at  my  paper  had,  as  I  believed,  a  greater  circulation  than  any  other 
political  paper  in  the  United  States- — that  I  had  one  of  the  best,  if  not  the 
■  most  Valuable,  printing  offices-  in  the  United  States — that  I  could  not  and 
would  not  support  Mr.  Van  Buren  for  the  Presidency — that  I  was  unwilling 
to  come  in  conflict  with  my  political  friends — that  I  was  young  '.'enough  to 
return  to  my  pro:ession — that  I  wanted  no  office  in  his  gift,  but  if  his  pur- 
pose was  as  I  had  been  told,  then  it  was  my  wish  that  he  would  select  some 
one  else,  who  could  purchase  my  paper — that  I  asked  no  advance  upon  the 
actual  cost,  and  no  compensation  for  my  services  in  the  past.  My  objection 
to  Mr.  Van  Buren  was,  that  L  believed  that  as  soon  as  he  believed  that,  by 
the  influence  of  the  party,  organization,  aided  by  the  public  patronage,  he  could 
command  the  Southern  vote,  he  would  then  bid  against  Mr.  Clay  and  Mr. 
Adams  tor  the  Northern  vote,  and  thus  strengthen  that  sectional  organization 
which  it  was  my  desire  to  defeat. 

General  Jackson  urged  me  to  remain,  pledging  himself,  in  the  most  solemn 
manner  pos-ible,  that  if  any  member  of  his  Cabinet  should,  at  any  time,  use 
the  patronage  of  his  department  with  a  view  to  promote  the  election  of  Mr. 
Van  Buren,  the  member  doing  so  should  resign;  and,  as  an  earnest  of  his 
sincerity,  said  that  the  first  official  act,  after  his  inauguration,  would  be  to 
cause  the  patronage  of  the  State  department  to  be  sent  to  my  office,  which  he 
did.  I  have  not  the  time  or  space,  now,  to  explain  the  measures  or  the  mo- 
tives which,  if  General  Jackson  was  sincere  in  the  pledges  then  given,  induced 
him  afterward  to  exert  Jns  whole  personal  and  official  influence  in  aid  of  the 
election  of  Mr.  Van  Buren  as  his  successor,  although  it  is  my  purpose,  if  life 
and  health  permit*  to  do  so  hereafter.  I  recur  to  them  now  to  explain  that 
the  purpose  of  Mr.  Adams  and  Mr.  Clay  being  to  organize  a  sectional  .>orth- 
ern  party,  predica'ed  on  the  emancipation  of  our  slaves,  and  a  system  of  high 
duties  for  the  benefit  of  Northern  manufacturers  for  making  turnpike  roads, 
to  be  constructed  under  the  patronage  of  a  corrupt  sectional  Northern  Con- 
gressional majority  for  the  purpose  of  electing  Mr.  Clay  Presjdent,  and  Gen. 
Jackson  having  become  the  acknowledged  partisan  of  Mr.  Van  Buren,  the 
near  approach  of  the  payment  of  the  national  debt,  whilst  admitting  the  full 
power  of  Congress  to  lay  and  collect  duties  requisite  to  pay  the  debts  and 
-carry  on  the  Government,  had  made  it  necessary  for  those   who  did   not  be- 


48 


lieve  that  they  had  the  power  to  increase  the  duties  for  the  purpose  of  creating 
a  laro'e  surplus  revenue,  to  be  expended  under  appropriations  made  by  a  cor- 
rupt sectional  majority  of  Congress,  to  rally  all  their  energies  and  resources 
to  prevent  a  «ystein  of  measures  which  we  foresaw,  and  foretold  must  result 
in  sectional  conflicts  which  would,  df  necessity,  alienate  the  South  from  the 
North  and,  if  not  arrested,  terminate  in  a  dissolution  of  the  Union.  Ilence 
the  nullification  of  South  Carolina  was  a  movement  for  the  preservation  of  the 
Union  by  restraining  the  action  of  Congress  within  the  powers  granted  by 
the  Constitution.  That,  movement  was,  for  a  time,  successful.  The  subse- 
quent action  of  Van  Buren  fully  justified  my  opposition  to  him,  and  thecrisi- 
in  which  We  are  now  placed  proves  not  only  the  propriety,  but  the  necessity,  oa 
the  measures  which  I  have  again  and  again  urged  upon  the  people,  of  the  slav 
holdino-  States.  How  different  would  have  been  our  present  position  if,  as  a  peo- 
ple, the  South  had  adopted,  with  proper  energy,  the  system  of  measures  which  I 
•have  recommended.  One  purpose  of  this  statement  is  to  show  that  the  oppo- 
sition to  the  tariff  of  1828,  and  to  Mr.  Clay's  American  system,  was  not,  as 
many  believe,  an  opposition  to  domestic  manufactures.  It  was  an  opposi- 
tion to  the  organization  of  a  sectional  party  upon  principles  and  measures  in 
open  violation  of  the  letter  and  spirit  of  the  Constitution,  which,  it  was  fore- 
seen," must  terminate  in  the  dissolution  of  the  Union. 

Another  purpose  is  to  refer  to  the  fact  that  Congress  being  driven,  by  the 
action,  of  South  Carolina  and  of  the  State  Rights  party,  to  modify  the  tariff 
of  1828,  arid  the  payment  of  the  public  debt  having  left  a  large  surplus  of 
public  funds  in  the  Bank  of  the  United  States,  Van  Buren  induced  General 
Jackson  to  go  through  Pennsylvania  and  New  York  to  Boston,  where  he  was 
met  bv  Mi\~Van  Burei>  and  several  of  his  leading  political  parlizans,  who, 
Mr.  Poinsett  dissenting,  as  he  assured  me  he  did,  induced  him  to  seize  upon 
the  public  .deposits,  which  were  transferred  from  the  Bank,  where  they  were 
placed  by  operation  of  law,  and  placed  on  deposit  in  local  Banks,  selected  by 
a  partisan  Secretary  of  the  Treasury.  It  was  the  influence  of  the  public 
money  in  these  banks,  and  the  corrupt  abuse  of  the  public  patronage  which 
elected  Mi'.  Van  Buren.  This  transfer  of  the  public  deposits  to  the  pet  bank,s 
led  to  a  vast  expansion  of  the  currency,  and  immense  speculations,  especially 
in  the  public  lands,  so  that,  although  the  average  sales  for. the  ten  years  pre- 
ceding General  Jackson's  election,  did  not  amount  to  800,000  acres,  12,564,- 
218  acres  were  sold  in  1835,  and  20,074,870  acres  were  sold  in  1836;  and 
although  there  were,  in  1830,  but  33Q  banks,  with  a  circulation  of  $01,323,- 
898,  there  were  634  banks,  with  a  circulation  of  $149,185,890,  in   1837* 

*  Note. :The  following  table  shows  the  number  of  banks  that  were  in  the  .United  States, 

their  capital,  loans  and  discounts,  specie,  circulation,  and  deposits,  from  1830  to  1840  in- 
clusive: £•  :'.;'  . 


Date. 

JS'o.  of 
Banks. 

~  ..  .    1  Loans  and 
Capital.   j  jjiseouuts. 

Specie. 

Circulation. 

Deposits.  . 

Jan.  1820 

308 

$137,110,611 

$19,820,240 

$  44,863,344 

$  35,950,470 

••   1830 

330 

145,192,268 

$200,451,214 

22,114,917 

61,323,898 

55,559,828 

"   1834 

5.00 

200,005,944 

324,119,499 

94,839,570 

75,666,986 

.  "   1835 

558 

231,250,337 

365,163,834 

43.937,625 

103,692.495 

'  ss^i^e* 

"   18.36 

567 

251,875,2.92 

457,506,080 

40,019,594 

140,301,038 

115,104,444 

"   1837 

634 

290,772,041 

525,115,702 

37,915,340 

149,185,890 

127,397,185 

"   1838 

663 

317,636,778 

485,631,687 

35,184,112 

116,138,910 

84,691,184 

"   1839 

662 

327,132,512 

492,27S,015 

45.132,673 

135,170,99p 

90,240,146 

"   1840 

722 

35S,442.692 

462,896,523 

33,105,155 

106,968,572 

75,696,857 

49 


These  speculations  and  this  expansion  of  the  currency  took  place  cotempo- 
raneously  with  like  speculations  and  expansion  of  the  currency  in  England 
consequent  upon  the  placing,  by  the  Government,  in  the  Bank  of  England,  of 
the  large  sums,  paid  under  the  acis  emancipating  the  West  India  slaves  and 
the  abrogation  of  the  East  India  monopoly,  being  about  8120,01)0,000,  tlia 
greater  part  of  which,  in  anticipation  of  the  payments  to  be  made  by  the 
bank,  was  loaned  to  money  dealers,  and  the  consequence  was  an  inflation  of 
the  cudfcncy  nearly  or  quite  as  great  as  in  the  United  States.  The  payment 
by  the  Bank  of  England  to  the  proper  claimants,  as  their  accounts  weie  ad- 
justed, and  the  transfer  from  the  pet  banks  of  the  surplus  revenues  to  the  States 
under  an  act  of  Congress,  operating  in  England  and  the  United  States  at  the 
same  time,  caused  the  reaction  in  both  countries,  inflicting  unexampled  pecuniary 
losses  and  distress,  originating  in  both  countries  from  the  efforts  of  those  who 
held  the  control  of  the  currency  to  increase  their  power  and  influence  by 
the,  use  of  a  defective  svvteni  of  finance.  Had  England  made  her 
credit  in  the  shape  of  certificates  receivable  in  public- dues 'and  fundable,  as  I 
propose,  a  legal  tender,  the  excess  would  have  been  funded,  and  there  would 
have  been  no  inflation  of  the  currency,  and  consequently  no  reactionary  de- 
maud  for  specie,  and  no  pecuniary  losses  or  bankruptcy.  Had  the  United 
States  issued  their  credit  in  the  form  and  fundable  as  proposed,  there  would 
have  been  no  surplus  revenue  in  the  banks,  no  speculation  in  the  public  lands, 
no  specie  circular,  issued  by  a  party  President  to  protect,  the  pet  banks  from 
the  demand  for  specie,  the  consequenae  of  the  over-issua  of  their  circulation 
liin  aid  of  the  corrupt  .speculations  of  political  favorites. 

The  pretence  for  the  transfer  of  the  public  deposits  from  the  Bank  of  the 
United  States  to  the,  pet  banks  was,  that  the  power  of  that  bank  would  be 
abused,  and  hence  the  pet  banks  were   required,  by  an  order  from  the  Secre- 


I'ho  foliowinjj  Utbie  shows  the  number  of  acres  of  public  land  offered  for  side,  the  acres 
sold,  the  amount  paid  by  purchasers,  and  the  average  price  paid  per  acre  for  the  severit-l 
years  given: 


Years. 

Acres  offered  for  sale. 

Acres.  Sold.          1 

Ai«ount  paid  by  pur- 
chasers. 

Average    priet-\ 

1824 

7,294,186 

7^9,323 

§      953,799 

§  1.27 

1825 

3,418,604 

893,461 

1,205,068 

1.35 

1826 

2,880,703 

848,082 

1,128,617- 

1    oo 
I.OO 

1827 

3,314,816 

926,727 

1,318,305 

1.42 

1828 

3,268,493 

965,600  . 

1,221,357 

1.26 

1829 

(5,149,962    ' 

1.244,860 

1,572,863 

1.26 

1830 

6,750,798 

1,929,733 

2,433,432 

1.26 

1831 

11,005,561 

2,777,856 

3,557,023 

1.28 

1832 

■  4,205,805 

2,462,342 

3,115,376 

1.27    . 

1833 

6,614,596 

3,856,227 

4,972,284 

1.29 

1834 

13,056,865 

4,658,218 

6,099,881 

1.31 

1835 

13,767,268 

12,561,478 

15,999,804 

1.27 

1836 

509,034 

20,074,870 

25,167,833 

1.25 

1837 

4,805,462 

6,127,418 

1.28 

Total 

122,512,384 

61,296,411 

$78,340,557 

$1  27£  1 

— ■ — m 

50 

tary  of  the  Treasury,  to  discount  freely,  and  thus  prevent  the  monetary 
crisis  which,  by  some  it  was  urged,  would  be  the  consequence  of  the  sudden 
withdrawal  of  so  large  a  deposit  Failing  to  get  a  renewal  of  its  charter 
from  Congress,  the  bank  obtained  a  charter  from  the  Legislature  of  Pennsyl- 
vania, and  instead  of  reducing  their  line  of  discounts,  the  Directory  availed 
themselves  of  the  inflation  of  the  currency  to  sell  out  their  branches,  recdvino- 
the  notes  of  the  pet  banks  in  payment;  and,  instead  of  making  war  upon  the 
pet  banks  by  demanding  payment  in  specie,  the  large  sums  thus  obtained 
were  invested  in  public  securities  and  in  advances  upon  cotton,  intehdi  *,  by 
the  sale  of  the  cotton  and  the  State  securities  in  Europe,  to  reinstate  the 
capital  which  had  been  invested  in  the  branches;  and  Biddle  and  Humphries 
were  sent  to  Liverpool  as  the  agents  of  the  bank  charged  with  the  sale  of  the 
cotton,  and  Mr.  Jaudon,  the  cashier,  was  sent  to  London  with  the  State  secu- 
rities. The  great  tire  in  New  York  had  deprived  many  of  the  merchants  of 
that  city  of  the  means  of  paying  the  large  sums  falling!  due  to  their  British 
creditors.  The  bank,  under  the  advice  of  Mr.  Biddle.,  relying  on  the  sale  of 
cotton  by  Biddle  and  Humphries,  and  of  State  securities  by  Mr.  Jaudon,  ad- 
vanced large  sums  in  the  shape  of  bills  on  London  and  Paris.  Before  this 
time,  any  American  merchant  who  could  get  an  acceptance  by  Wilde,  Wig- 
gin  or  Wilsons,  three  American  houses  in  London,  could  purchase  British 
goods  upon  six  and  twelve  months  credit.  .  Apprehending  a  monetary  crisis, 
Wiggin  wrote  to  his  American  correspondents  that  he  could  no  longer  accept 
as  he  had  done.  His  having  done  so  came  to  the  knowledge  of  the  Directors 
of  the  Bank  of  England.  The  Governor  of  that  bank  called  on  Mr.  Wiggin 
and  urged  him  to  withdraw  his  letters,  saying  that  the  English  warehouses 
were  filled  with  goods  ;  and,  as  the  bank  wished  to  encourage  the  trade  with 
America,  although  he  could  not  pledge  the  bank,  yet  as  governor  of  the  bank, 
he  would  exert  Ids  influence  to  sustain  Mr.  Wiggin  in  case  of  a  crisis.  Under 
that  pledge  Mr.  Wiggin  recalled  his  letters,  and  was  under  acceptance  for 
more  than  thirteen  millions  of  dollars,  when  the  bank  passed  an  "order  that  no 
bill,  predicated  on  any  transactions  in  American  produce,  should  be  discounted 
in  bank.  The  consequence  was  that  Wilde,  Wiggin  and  Wilsons  all  failed  • 
that  Biddle  and  Humphries  could  not  sell  cotton,  nor  could  Jaudon  sell  the  se- 
cu  rides  upon  which  he  relied  to  protect  the  cisedit  of  the  Bank  of  the  United 
States,  and  he  was  compelled  to  make  hypothecations  and  borrow  money  at  rates 
which  was  followed  by  so  great  a  depreciation  of  the  values  of  the  securities, 
in  which  the  capital  of  the  bank  was  invested,  as  ultimately  to  absorb  much 
the  greater  part  of  its  assets,, 

I  do  not  charge  that  the  conduct  of  the  Bank  of  England  was  purposely 
intended  to  inflict  the  severe  suffering  and  distress  which  were  its  consequence; 
nor  do  1  charge  that  the  assurances  of  aid,  given  by  the  Governor  of  the 
Bank  to  Mr.  Wiggin,  were  intended  to  induce  him  to  make  acceptances  which 
he  (the  Governor)  knew  he  would  not  be  able  to  meet.  But  I  do  charge  that 
the  fluctuations  in  the  value  of  money  and  property  were  the  inevitable  re- 
sulting consequence  of  the  system  of  currency  and  finance  which  compelled 
the  Bank,  to  use  the  words  of  Samuel  Jones  Lloyd,  to  "save  herself  bv 
the  destruction  of  all  around  her."  Thus,  if  we  recur  to  the  crisis  of 
1794,  we  find  the  directory  of  the  Bank  in  a  forma!  protest  to  the  Govern- 
ment, notifying  the  Minister  "  that  if  any  further  loan  or  advance  of  money 


51 

# 

to  the  Emperor,  or  to  any  of  the  foreign  States,  should,  in  the  present  stale  of 
affairs,  take  place,  it  will  in  all  probability  prove  fatal  to  the  Bank  of  England . 
It  was  indispensably  necessary  to  make  the  loan,  and  hence  the  Bank,  in  1797, 
was  forced  to  suspend  specie  payment.  Again,  in  1814  and  1815,  the  Uans 
to  4,he  allies  of  England  were  $9(3,831,539,  and  there  was  unexampled'dis- 
tress.  Again,  in  the  eight  years,  from  1818  to  1825  inclusive,  the  sums 
advanced  on  foreign  loans  and  speculative*  schemes  was  §522,092,500,  and 
the  consequence  was,  that  the  demand  for  specie  was  so  severe  and  the  depre- 
ciation of  the  value  of  property  so  great,  as  to  cause  unparalleled  loss,  bank- 
ruptcy.and  distress.  Again,  in  1830-37,  the  Government  having  placed  in 
the  bank  of  England  the  funds  intended  to  pay  the  West  India  claimants, 
largfi  sums  were  loaned  to  the  money  dealers — this  gave  birth  to  speculations, 
the  currency  was  increased,  prices  were  consequently  inflated,  to  be  followed 
by  a  reaction,  causing,  if  possible,  still'greater  reduction  of  prices,  with  greater 
pecuniary  losses  and  distress.  And  again,  in  1853  to  1857,  the  demand  for 
gold  to  pay  the  expenses  of  the  wars  in  the  Crimea,  in  India  and  China, 
created  a»reuewed  demand  for  gold  and  silver,  acting  upon  the  values  of  pro- 
perty precisely  in  the  same  manner.  Now,  why  did  these  frequent  recurring 
demands  for  money  always  cause  a  ruinous  depreciation  in  the  values  of  pro- 
perty, enriching  the  creditor  without  merit  and  impoverishing  the  debtor  with- 
out fault?  Was  it  not  because  the  creditor  was  enabled  to  compel  the  debtor 
to  make  payment  in  gold,  under  the  delusion  that  gold  and  silver  are  more 
uniform  and  stable  in  value  than  any  other  medium  of  purchase  or  payment, 
and  that  therefore  nothing  but  gold  and  silver  should,  be  recognized  as  money* 

Is  it  necessary  to  adduce.additional  facts  or  arguments  to  prove  that  tins  is 
a  delusion?  We  have  seen  that  the  average  specie  in  the  banks  of-  the  city  of 
New  York,  from  1833  to  October,  1857,  was,  about  eleven  and  a  half  millions, 
whilst  the  daily  average  settlements  between  the  banks  alone  were  about 
thirty  millions  of  dollars,  and  the  daily  average  settlements  between  individu- 
als, which  do  n'ot  appear  in  the  returns  of  the  Clearing  House,  are  estimated 
at  fifty  millions  of  dollars,  and  Colwell  estimates  the  payments  made  through 
the  banks  in  the  United  States  in  1857,  by  set  off,  without  one  dollar  in  specie, 
at  eighty-Jive  thousand  millions  of  dollars,  and  we  are  told  by  Chivalier, 
that  the  amount  of  the  Bills  of  Exchange,  at  one  time  in  circulation  in  Great 
Britain,  was  £180,000,000,  Or  $900,000,000. 

These  facts  prove  that  property,  and  noJ,  specie,  is  the  true  basis  of  credit,, 
and  that  a  currency  predicated  on  the  entire  property  of  an  agricultural  and  l 
commercial  country,  may  be  made  much  more, uniform  and  stable  in  value 
lhan.  if  convertible  into  gold,  for  surely  it  will  not  be  necessary  to  adduce  other"1-' 
proofe-itoj  demonstrate  that  every  monetary  crisis,  every  general  suspensionV-'df-1;'1 
the-b^mksjan.the  United  States,  has  been  caused  by  the  monetary  revulsiotiS1'; 
whiefe'^havenQQCurred  in*  England,  and  the  demand  for  specie  created  ttex'iVgir1*- 
the/J.4aiikr-oi|;-E»gliind.  My  proposition  is  to  create  for  the  Confederate^tates0' 
a  ewMiiiif  (\\m<litiiit&l  ©p  the  entire  property  of  the  whole  country.  tiBb&sf'&W$ls 
td  befr^gulatgdrby  r-ee^iving  nothing  but  the  public  credit  or  go ld*'.in;: payment10 
of.v-tam'*?  <and  $9  bausoifchsLescess,  if  any  there  be,  to  be  funded  ffltJd.nvertTble--^ 
bojrd^i  hearing  a  proper  -ratef>€tf?;  interest.  Thus  say  that  the  current  ^pe'fM?-^11 
rui^i^fieiij^as^jiiKiaiidiagnh'eihttereston  the  public  debt,  wiU^^nfcMmdre^-^ 
millions  of  dollars,  and  that  the  annual  taxes  be  the  same,  it  will  require  the 


h  52 

■efhole  sum  of  the  current  issue  to  pay  the  taxes,  and  any  deficiency  must  be 
paid  in  gold,  or  by  reconverting'  so  much  of  the  funded  debt  as  may  be  requi- 
site. If  the  banks  are  required  to  redeem  their  notes  in  the  Confederate  cur- 
rency, and  to  place  the  convertible  funded  debt  with  the  Treasurers  of  the 
several  States,  in  trust  for  that  purpose,  then  the  value  of  the  Treasury  Cer- 
tificates will  be  regulated  by  the  rate  of  interest  paid  upon  the  funded  debt, 
and  the  value  of  the  bank  notes  will  be  regulated  by  the  value  of  the  cer- 
'  tificates. 

God,  in  His  Providence,  has  given  to  the  people  of  the  Confederate  States 
sources  of  individual  independence,  wealth  and  prosperity,  such  as  He  has 
given  to  no  other  people  on  the  globe.     He  has  given  us  a  soil  and  climate 
peculiarly  adapted  to  the  cultivation  of  cotton  and  wool;  He  has  filled  our 
mountains  with  a  greater  abundance  of  mineral  wealth  ;  He  has  given  us  an 
abundant  supply  of  living  streams,  which,  in  their  progress  from  our  moun- 
tains to  the  sea,  proclaim  in  a  language  not  to  be  misunderstood  the  purpose 
of  their  creation  ;  He  has  given  us  a  territory  so  large  and  so  fertile,  as  to  be 
capable  of  feeding  a  population  as  great  as  that  of  Europe ;  He  has  given  uk 
the  labor  peculiarly  adapted  to  the  cultivation  of  the  great  staples  which  con- 
stitute the  chief  elements  of  modern  industry  and  of  modern  commerce.     He 
has  so  identified  the  interests  of  the  governing  class  with  those  of  the  servile 
race  as  to  secure  to  us  a  purer  religion,  a  more  refined  individual  and  social 
morality,  and  a  more  enlightened,  more  independent,  and  a  freer  political  or- 
ganization than  He  has  given  to  any  other  nation  upon  earth.     He  has  sepa- 
rated us  from  the  rest  of  mankind,  as  He  separated  His  chosen  people  under 
the  Mosaic  dispensation,  and  that  He  has  had  a  special  purpose  in  doing  so, 
no  one,  who  carefully  and  prayerfully  studies  the  manifestations  of  His  will 
and  the  indication  of  His  purposes,  can  doubt.     He  lias  not  so  richly  endowed 
us,  as  a  people,  by  accident.     His  purpose  is  forcibly  illustrated  by  the  para- 
ble given   in  the  twenty-fifth  chapter  of  Matthew — we  are  but  trustees,  and 
are  responsible  to  God  for  the  manner  in  which  we  execute  the  trust  commit- 
ted to  us.     If  we  would  discharge  our  duty,  w:e  must  so  use  the  abundance 
which  we  possess  as  best  to  promote  His  purpose  and  glory,  and  this  cannot  be 
done  unless  we  become  a  manufacturing  and  commercial,  as  well  as  an  agri- 
cultural people;  and  this  we  cannot  do  unless  we  so  organize  our  credit  as  U> 
make  it  available  in  the  development  of  our  abundant  resources,  and  enable 
us  successfully  to  compete  with  the  most  favored  nations  in  all  the  mechanic 
arts,  the  manufactures,  and  the  comiiierce,  which  characterize  the  progress  of 
modern  society. 

The  measures  which  I  propose  will  simplify  the  functions  of  the  Confederate 
Government.  It  will  reduce  the  action  of  that  Government  to  the  payment  of  * 
the  current  expenses,  and  collecting  the  current  taxes  after  funding  the  existing 
debt.  It  will  greatly  curtail  the  corrupting  influence  of  Executive  patronage. 
It  will  give  greater  stability  to,  the  values  of  the  curreftcy,  and  consequently 
to  the  values  of  property,  and  it  will  give  us  an  abundant  and  cheap  currency, 
uniform  and  stable  in  value,  giving  life  and  energy, to  the  productive  industry 
of  the  country  in  all  the  departments  of  labor.  It  will  lessen  the  burden  of 
taxation  by  substituting  the  certificates  of  the  Confederate  and  State  Govern- 
ments ior  bank  cotes  convertible  into  specie,  and  save  to  the  Government,, 
and  to  the  public,  and  to  the  banks,  the  interest  oh  the  mass  of  specie  which,, 


53 

under  8  revival  of  a  specie  currency,  must  be  held  as  the  basis  of  credit.  It 
will  enable  us  to  organize  a  system  of  education,  embracing  the  children  of 
our  deceased  soldiers,  enabling  all,- females  as  well  as  males,  to  earn  {he  com- 
pensation requisite  to"  feed,  clothe  and  educate  themselves,  training  them  to  bfc 
useful  members  of  society,  self-reliant  and  self-sustaining,  inspiring  the  rising 
generation  with  a  proper  sense  of  personal  independence  and  of  public  liberty. 
The  experience  of  the  war  demonstrates  the  necessity  of  a  greatefl»distnbu- 
tion  of  labor,  and  to  do  this  requires  an  appropriation  of  the  requisite  capital 
in  aid  of  the  efforts  of  individual  enterprise.  Th^re  is  a  praiseworthy  move- 
ment to  organize  an  ample  fund  to  educate  the  children  of  our  deceased  sol- 
diers. I  would  embrace  all  of  the  rising  generation — the  children  of  the 
living  and  of  the  dead — the  rich  and  the  poor;  and  would  so  diversify  their 
training  and  their  knowledge  as  to  enable  them  to  relieve  us  from  our  depen- 
dence upon  the  foreign  markets  for  articles  which  may  be  better  and  cheaper 
produced  at  home.  The  public  debt  in  the  shape  of  convertible  interest  bear- 
ing bonds,  deposited  with  the  Treasurers  of  the  several  States,  as  the  basis  of 
bank  issues,  will  give  us  an  abundant,  cheap  and  stable  currency,  and  banks 
organized  for  the  purpose  of  advancing  requisite  capital  to  competent  persons 
who  will  employ  male  and  females  in  appropriate  departments  of  labor,  with 
the  understanding  that  their  compensation  shall  be  such  that  six,  or  at  most 
eight,  hours  labor  per  day  shall  be  sufficient  to  pay  for  their  clothing,  board 
and  tuition,  and  also  to  provide  a  surplus  fund  to  aid  them  in  the  outset  of 
life,  will  give  to  the  shareholders  of  such  banks  a  proper  profit  on  the  capital' 
thus  invested,  and  stimulate  the  energies  and  industry  of  the  employer,  giving 
to  the  children  from  four  to  six  hours  for  study,  with  twelve  hours  per  day 
for  refreshment  and  recreation. 

Such  a  system  can  be  organized  if  the  Government  will  make  the  Treasury 
certificates  a  tender,  and  adopt  the  system  of  finance  and  currency  which  I 
propose.  It  will  convert  the  public  debt  into  a  fund  ;  will  build  our  railroads, 
establish  our  manufactures,  and  educate  our  children,  and  make  us  the  most 
enlightened  and  prosperous  people  upon  the  face  of  the  globe.  It  will  do 
more.  It  will  achieve  our  financial  independence  by  elevating  us  above  the 
controlling  influence  of  that  new  power  in  Europe,  so  forcibly  described  in 
the  article  from  the  London  Spectator,  given  in  the  appendix,  which  will  then 
be  no  longer  able  to  place  us  beneath  the  pressure  of  the. machinery  by  which 
they  regulate  the  value  of  the  property  of  all  those  who  are  subject  to  its 
control. 

♦ 
The  effect  of  funding  at  a  low.  rate  of  interest  is  forcibly  illus- 
trated by  the  history  of  the  public  debt  of  England  and  the  system  of 
finance  under  which  that  debt  was  created.  It  would  seem  that  our  Con- 
gress and  the  late  Secretary  of  the  Treasury  believe  that  the  excellence  of 
human  wisdom  consists  in  tracing,  as  nearly  as  possible,  the  example  of 
England.  Thus,  instead  of  giving  value  to  our  currency  by  funding  the 
surplus  at  a  rate  of  interest  which  will,  at  the  same  time,  give  value  to  tho 
currency  and  the  funded  debt,  they  depreciate  the  currency  and  the  debt, 
requiring  the  currency  to  be  funded  at  a  depreciation  of  thirty-five  per  cent. 
for  a  six  per  cent.  bond.  If  funded  at  par,  as  I  propose,  the  value  of  tlfe 
bond  would  regulate  the  value  of  the  currency. 


54 

McCulloch,  in  his  Dictionary,  says  that — 

During  the  reigns  of  William  and  Anne,  the  interest  stipulated  for  loans  wa*  very  va- 
rious. But  in  the  reign  «>f  George  II,  a  different  practice  was  adopted;  Instead  of 
varying  the  interest  upon  the  loan  according  to  the  state  of  the  money  market  at  the 
time.  the.  interest  was  generally  fixed  at  8  or  3}  per  cent,  the  necessary  variation  jDeing 
made  in  the  principal  funded.  Thus  suppose  the  Government  were  anxious  to  borrow; 
that  :hey  preferred  borrowing  in  a  3  per  10U  stock,  and  that  they  could  not  negotiate  a 
loan  fur  less  than  4o  per  100;  they  effected  their  object  by  giving  the  lender  in  return 
for  every  £100  advanced  £150  3  per  cent,  stock — that  is,  they  bound  the  country  to  pay 
him  or  Ym  assignees  £4  10s.  a  year  in  all  time  to  come,  or  otherwise,  to  extinguish  the 
debt  by  a  payment  of  £150.  In  consequence  of  the  prevalence  of  this  practice,  the 
principal  of  the  debt  now  existing  amounts  to  nearly  two-fifths  more  than  the  sum  ac- 
tually advanced  by  the  lenders. 

In  a  note  we  are  referred  to  the  93d  No.  of  the  Edinburgh  Review,  where  we  are  told 
that  "in  1781,  a  loan  of  £12.000,000,  or  £60,000,000,  was  negotiated,  and  for  this  sum 
the  Government  gave  £18,000,000  (or  £90,000,000)  of  3  per  cent,  stock,  a.  d  £3.000,000 
(or  £15,000,000)  of  4  per  cent,  stock.  On  the  whole,  therelore,  £*660,000  (or  £3  300,000) 
of  interest  was  paid  for  this  loan,  being  rather  more  than  5i  per  cent;  and  a  fictitious 
capital  was  created  in  favor  of  the  lender  of  no  less  than  £9,000,000  (or  §4&,00n,0t>0)! 
But  it  is  obvious  that,  had  this  loan  been  negotiated  without  any  increase  of  capital  at 
6,  or  even  6  J,  per  cent ,  the  charge  on  the  account  might  have  been  reduced  in  the  course 
of  half  a  dozen  years  to  3  or  3 J  per  cent,  on  the  £  2,o00,ti00  (or  §60,000,000)  actually 
borrowed  ;  whereas,  owing  to  the  mode  in  which  it  was  contracted,  nothing  could  be  de- 
ducted from  the  annual  charge  without  being  previously  prepared  to  offer  the  bolder* 
£'21,000,00'i  for  the  £1-2,000,000  (or  $105,0u0,000  for  the  $60,000,000)  they  had  originally 
advanced. 

The  Review  adds  : 

Nothing,  we  are  sorry  to  say,  is  more  easy  than  to  point  out  innumerable  instances  of 
this  sort,  in  which  the  public  interests  have  been  sacrificed,  not  intentionally,  indeed,  but 
through  ignorance,  or  :.  desire  to  grasp  at  an  immediate  advantage  in  the  mo,st  extraor- 
dinary manner.  The  very  next  loans  negotiated  by  Lord  North,  in  1782,  was  for  £l:'..5t;0,t 
000,  for  which  Government  gave  £  1^,500,000  of  3  per  cents ;  and  £6,750  000  4  per  cent  s., 
exclusive  of  an  annuity  of  17s.  6d.  for  every  £100  advanced  for  seventy  ei^ht  years.  '1  he 
country  was  in  this  way  bound  to  pay  an  interest  of  £793,1-5  a  year,  inclusive  of  the 
annuity,  being  at  the  rate  of  £5  16*  lod  per  cent.;  and  it  was  rendered  impossible  to 
reduce  this  heavy  charge  at  any  future  period  without  previously  consenting  to  sacri- 
fice £6,750,000. 

But  it  is  unnecessary  to  go  back  to  the  American  Avar  for  proof  of  the  extreme  inex- 
pediency of  funding  in  this  manner.  Most*  of  the  loans  negotiated  during  the  late 
(French)  war  were  funded  in  the  same  way,  and  some  of  them  on  still  more  ruinous  and 
improvident  terms  on  the  part  of  the  public.  Thus,  according  to  the  terms  on  which  k 
loan  of  £18,000,000  sterling  was  bargained  for  in  1795,  a  capital  of  £21.000,000  3  per 
cent.  s<oc«  and  £4,600,000  4  per  cents.,  exclusive  of  a  long  annuity  of  £5S,5t)0,  were  as- 
signed to  the  subscribers.  But  the  terms  of  the  loan  of  £13,000,000,  negotiated  in  1T9S, 
were  still  more  extravagant.  For  every  £100  advanced  entitled  the  lender  to  £175  8 
per  cent  stock,  £20  4  per  cent,  stock,  and  an  annuity  of  6  shillings  for  62-|  years  ;  or,  iu 
dther  words,  for  every  £100  advanced  to  the  Government,  it  bound  the  country  to  pay 
an  annual  interest  of  £6  Is, exclusive  of  the  long  annuity  of  6  shillings 

The  Review  then  adds  further: 

The  improvidence  of  this  transaction  is  glaring  and  obvious.  There  can  be  no  manner 
of  doubt  that  an  addition  of  from  £  to  ^  per  cent,  would  have  procured  this  loin  with- 
out any  increase  of  principal;  but,  supposing  that  1  percent  additional  interest  had  been 
required,  instead  of  being  subjected  to  a  constant  pa\mcnt  in  all  time  to  come  of  £5 
12s.  4d.,  for  every  £l<0  advanced,  we  should  have  had  £6,  or  £6  10s.  to  pay  for  three  or 
four  years,  and  £3,  or  at  "most  £3  10s.  ever  after. 

By  way  of  illustrating  the  system  in  a  still  more  striking  light,  and  bring- 
ipg  the  results  of  the  different  operations,  connected  with  the  fuuding  of  th« 


55 

British  national  debt  during  tbe  French  war,  into  one  point  of  view,  the  Re- 
vieiv  gives  a  statement  of  loans  contracted  in  each  year,  from  1793  to  1816, 
both  inclusive;  of  the  amount  of  all  sorts  of  stock  created  on  account 
of  these  loans;  of  the  total  interest  on  dividend  payable  on  them;  of 
the  portions  of  said  loans  paid  to  the  commissioners  of  the  sinking  fund  ;  of 
the  amount  of  all  sorts  of  stock  purchased  by  said  commissioners;  and  of  the 
amount  "of  the  dividends  on  said  stock. 

Upon  this  exhibit,  the  Review  remarks  that — 

It  appears,  then,  that  the  sums  borrowed  on  account  of  the  public  service,  during  tbe 
late  war,  really  amounted  to  £390.85  .','-0(3 ;  and  it  also  appears  that  an  excess  of  8173,- 
1)28,782  (£569,380,988— £396  852,206),  of  capital  or  stock,  was  created  in  favor  of  the 
lenders,  over  and  above  the  sums  advanced  by  them,  being  at  the  rate  of  nearly  fifty 
per  cent,  on  the  sum  lent.  And  it  further  appears  that,  the  whole  annual  charge  on  ac- 
count of  the  money  borrowed  during  the  late  war,  amounted. at  its  close,  to  £21,006,631 
being  at  the  rate  of  about  b\  per  cent. 

But  it  is  evident  that,  had  the  sums  thus  borrowed  been  funded,  without  any  artificial., 
increase  of  capita!,  id  a  5£,  a  of,  or  a  6  per  cent  stock,  the  charge  on  account  of  interest, 
might  now  have  been  reduced  from  5£  to  3  or  Si  per  cent.,  or  from  twenty-one  to  twelve 
or  fourteen  .millions ! 

It  thus  appears  from  this  statement  that  the  British  public  are  now  paying 
3  per  cent,  per  annum,  on  £172,078,782,  more  than  they  would  pay  if  the 
loans  had  been  contracted  at  par;  and  McCulloch  says  that  between  1822  and 
1824,  by  an  application  of  part  of  the  surplus  revenue  and  the  reduction  of 
interest  on  the  4  and  5  per  cent,  stocks,  existing  in  1817,  and  by  that  paid  on 
tbe  unfunded  debt,  the  total  annual  saving  by  the  reduction  of  interest,  be- 
tween 1822  and  1824,  has  been  £2,355,845,  or  $11,779,225.  If  to  this  be 
added  interest,  at  3  percent.,  upon  the  £173,028,782,.  or  $865,143,910— the 
excess  created  by  the  erroneous  system  of  funding — it  will  give  an  an  annuity 
of  $37,633,542,  which  compounded  at  3  per  cent.,  will,  in  forty-one  years, 
give  the  sum  of  $3,089,426,392. 

If  the  loss  to  the  British  Government «and  people,  bv  their  system  of  bor- 
rowing and  funding  £396,352.206  (equal  to  $1,961,761,392),  was,  in  41 
years,  83,089,426,392,  what  will  be  the  loss  to  the  people  and  Government 
of  the  Confederate  States  by  our  present  system  of  borrowing  and  funding 
the  sums  required  to  "carry  on  the  Government  of  the  Confederate  States?" 

Whilst  I  am  writing,  a  morning  paper  says:  "  We  understand, 
from  an  authority  which  we  regard  as  altogether  reliable,  that  the 
features  of  a  bill  for  arming  the  negroes  and  placing  them  in  the 
field,  is  being  canvassed  by  a  circle  of  politicians,  prior  to  the  intro- 
duction before  the  Confederate  Congress.  Tbe  bill  proposes — 1st, 
To  conscribe  all  the  able-bodied  negroes  of  tbe  country,  between  the 
ages  of  IS  and  45,  respectively.  2d.  To  organize  this  force  into 
regiments,  brigades  and  divisions,  and  to  arm  and  equip  them  thor- 
oughly as  soldiers.  3d.  To  officer  the-  forces  thus  organized  from 
meritorious  soldiers  and  subalterns  now  in  the  field.  4th.  To  offer 
fetch  negro  who  serves  faithfully  to  the  end  of  the  war  his  freedom." 

Coupled  with  the  suggestion  that  we  are  not  fighting  for  the  insti- 
tution of  slavery,  this  is,  indeed,  a  most  startling  and  alarming 
proposition — To  arm   and  train   our  negroes  as  soldiers,  with  the 


56 

promise  of  freedom  in  ease  they  serve  faithfully  to  the  end  of  tht* 
war!!  What  would  be  the  inevitable  effect  ofjueh-a  measure? 
Would  it  not,  of  itself,  accomplish  all  that  the  North  can  do  by  the 
most  successful  prosecution  of  the  war  ?  Would  it  not  substitute 
the  Northern  for  the  Southern  social  organization  and  characteris- 
tics ?  Would  it  not  be  worse  than  reconstruction  ?  Would  it  not 
be  subjugation  ?  Would  it  not  deprive  us  of  the  labor  requisite  to 
produce  cotton  and  tobacco,  and  thus  deprive  us  of  the  means  of  sus- 
taining our  credit  and  of  transferring  to  the  consumers  of  British 
goods  a  large  part  of  the  burden  of  our  public  debt  ?  Under  such 
circumstances,  I  feel  it  to  be  my  duty  to  give  a  brief  notice  of  the 
rise  and  progress  of  Abolition  in  England  and  in  the  United  States, 
and  to  call  upon  the  people,  and  especially  upon  our  gallant  army, 
to  unite  in  denouncing  a  measure  so  unwise,  and  to  mark  with  the 
severest  reprobation  any  public  man  who  dares  to  give  to  it  the 
slightest  encouragement,  countenance  or  support. 

ENGLAND  AND  THE  SLAVE  TRADE. 

By  the  lGth  article  of  the  treaty  of  Utrecht,  England  confirmed 
the  contract  made  by  the  English  Guinea  Company  Avith  the  King 
of  Spain,  by  which  that  company  gave  to  Spain  200,000  crowns,  and 
to  the  Kings  of  Spain  and  of  England  each  one  fourth  part  of  the 
profits  of  their  trade,  lor  the  privilege  of  supplying  the  Spanish 
American  Colonies  with  African  slaves.  This  was  in  1713.  It  is 
well  known  that  England  compelled  Virginia,  regardless  of  her  re- 
monstrance, to  receive  slaves  imported  by  the  Yankees. 

England,  then,  engaged  in  the  slave  trade  because  it  gave  employ- 
ment to  British  ships  and  large  profits  to  British  trade.     . 

In  1817,  England  gave  to  Spain  two  millions  of  dollars  to  abolish 
the  slave  trade ! !  Why,  after  having  given  Spain  200,000  crowns 
and  one  fourth  part  of  the  profits  of  the  trade,  for  the  privilege  of 
supplying  her  colonies  with  slayes,  did  England  give  to  Spain  two 
millions  of  dollars  to  abolish  the  slave  trade  ?  Wilbcrforce,  in  his 
discussion  of  the  treaty  in  the  House  of  Commons,  gave  the  answer. 
He  says  : 

I  cannot  but  think  that  the  grant  to  Spain  will  be  morn  than  repaid  to  Great  Britain. 
in  ewnmercial  advantages,  by  the  opening  of  a  great  continent  to  British  industry — an 
object  which  would  be  entirely  defeated  if  the  t-lave  trade  was  to  be  carried  on  by  the 
Spanish  nation.  Our  commercial  connection  with  Africa  will  much  more  than  repay  us 
for  any  pecuniary  sacrifices  of  this  kind.  I  myself  will  live  to  see  Great  Britain  deriv- 
ing the  greatest  advantages  from  its  intercourse  with  Africa. 

That  we  may  the  better  understand  the  motives  which  govern  the 
measures  and  policy  of  England,  it  is  proper  that  we  look  into  her 
domestic  and  colonial  systems,  and  first,  of 

THE    COLONIAL   POLICY    OF   ENGLAND. 

I  quote  from  the  Edinburgh  Review,  of  August,  1825  : 

Tlie  act  of  ItioO,  passed  by  the  Republican  ParHament,  laid  the  foundation  of  the 
monopoly  system,  by  confining  the  import  and  export  trade  of  the  Colonies  exclusively 
to  Biitish  or  Colony  built  ships.  But  the  famous  Navigation  Act  of  16(50  (12  Charles 
II.,  cap.  18)  went  much  farther.     It  enacted  that  certain  specified  articles,  the  produce 


57 

of  the  Colonies,  and  since  well  known  in  commerce  as  enumerated  articles,  should  not 
he  exported  directly  from  the  Colonies  to  any  foreign  country;  but  that  they  should 
first  be  sent  t#  Britain,  and  there  unladen  (the  words  are,  hid  upon  the  shore),  before* 
they  could  be  forwarded  to  their  final  destination.  Sugar,  molasse?,  ginger,  fustic,  to- 
bacco, cotton   and  indigo  were  originally  enumerated;  and   the  list  was  subsequently 

enlarged  by  the  addition  of  coffee,  h'tdes"  and  skins,  iron,  corn,  lumber,  etc 

But  the  insatiable  rapacity  of  monopoly  was  not  to  be  satisfied  with  compelling  the 
colonists  to  sell  their  produce  exclusively  in  the  English  markets.  It  was  next  thought 
advisable  that  they  should  be  obliged  to  buy  such  foreign  articles  as  they  might  stand 
ia  need  of^xclusively  from  the  merchants  and  manuf; rcturers  of  England  For  this  ' 
purpose  it  was  enacted,  in  1663,  that  no  commodity  of  the  growth,  production  or  manu- 
facture of  Europe,  shall  be  imported  into  the  plantations,  but  such  as  are  laden  and  put 
on   board  iu   England,  Wales,  or  Berwick-upon-Tweed,  and   in  English  built  shipping, 

whereof  the  master  and  three  fourths  of  the  crew  are  English It  was 

also  a  leading  principle  in  the  system  of  Colonial  policy,  adopted  as  well  by  England  as 
by  the  other  European  nations,  to  discourage  all  attempts  to  manufacture  such  articles 
in  the  Colonies  as  could  be  provided  for  them  by  the  mother  country.  The  history  of 
our  Colonial  system  is  full  of  attempts  of  this  sort;  and  so  essential  was  the  principle 
deemed  to  the  idea  of  a  Colony,  that  even  Lord  Chatham  did  not  hesitate  to  declare  in 
his  place  in  Parliament,  that  the  British  Colonists  in  North  America  had  no  eight  to 
manufacture  even  a  nail  for  a  horse  shoe  !  And  when  such,  were  the  pnactmerits  made 
by  the  Legislature,  and  such  the  avowed  sentiments  of  fi  great  Parliamentary  leader 
and  a  friend  to  the  Colonies,  we  need  not  be  surprised  at  adeclaiation  of  a  late  Lord  Shef- 
field, who  did  no  more, 'indeed,  than  express  the  decided  opinion  of  almost  all  the  mer- 
chants and  politicians  of  liis  time,  when  he  affirmed  thus:  The  only  use  of  American 
Colonies  or  West  India  Islands  is  the  monopoly  of  their  consumption  and  the  carriage  of 
their  produce Were  it  not  for  the  perverse  and  most  injurious  regula- 
tions to  which  this  system  has  given  rise,  we  might  supply  ourselves  >viih  sugar  from 
the  East  Indies  or  South  America,  for  a  great  deal  less  than  it  now  costs  to  buy  it  from 
the  West  India  planters.  This  is  a  much  more  serious  loss  than  is  generally  supposed. 
Sugar  has  become  a  necessary,  equally  indispensable  to  the  poor  and  the  rich.  The 
quantity  of  West  India  sugar,  annually  consumed  in  Great  Britain,  may,  we  believe,  be 
taken  on  an  average  at  about  3SO,UOO,000  of  pounds  weight.  And  it  has  been  repeat- 
edly shown,  that  a  reduction  of  the  duties  on  sugar  from  the  East  Indies  and  South 
AmeTica,  to  the  same  level  with  those  laid  on  We"st  India  sugar,  would  enable  us  to  ob- 
tain as  good  sugar  for  4->}d.  per  lb,  as  now  costs  6d. ;  but  taking  the  difference  at  only 
Id.  per  lb ,  it  would  make  on  the  above-mentioned   quantity   a,  saving  of  no  less   than 

£1,583,000  ($7,915,000)  a  year Net  only,  however,  do  we  exclude  the 

sugars  of  the  Dutch  colonies,  Brazil  and  Louisiana,  but  we  actually  lay  10s.  a  cwt.  of 
higher  duties  on  the  sugar  imported  from  our  own  dominions  in  the  Ea-t  Indies,  than  on 
that  which  is  imported  from  the  West!  Not  satisfied  with  giving  the  West  India 
planters  a  monopoly  of  the  home  market  against  foreigners,  we  had  given  them  a  mo- 
nopoly against  our  own  subjects  in  the  East.  It  is  impossible  to  speak  too  strongly  in 
condemnation  of  this  arrangement — not  that  we  mean  to  insinuate  that  the  East  In- 
dians have  any  right  whatever  to  be  more  favorably  treated  than  the  West  Indians; 
but  we  contend  that  they  have  a  clear  and  undoubted  right  to  be  as  favorably  treated. 
To  attempt  to  enrich  the  latter,  by  preventing  the  forrher  from  bringing  their  produce 
to  our  market,  or  by  loading  it  with  higher  duties,  is  not  only  to  prefer  the  interests  of 
one  million,  and  those — we  do  not  say  it  disparagingly  of  the  planters — mostly  slavers, 
to  the  interests  of  one  hundred  millions  of  subjects;  but  is  totally  inconsistent  with,  and 
subversive  of,  every  principle  of  impartial  justice  and  sound  policy. 

It  is  said,  however,  that  slavery  exists  in  Hindostan  as  well  as  in  Jamaica,  and  that 
by  reducing  the  duties  on  East  India  sugar  and  facilitating  its  cultivation,  by  allowing 
Europeans  to  purchase  and  farm  lauds,  we  should  not  get  rid  of  the  evils  of  slavery,  but 
would  be  merely  substituting  the  produce  of  one  species  of  slave  labor  for  another. 
How,  admitting  for  a  moment  that  this  statement  is  well  founded,  still  it  is  certain,  frous 
the  cheapness  of  free  labor  in  Hindostan,  no  slaves  ever  have  been,  or  ever  can  be,  im- 
ported into  that  country.  And  hence  it  is  obyious  that,  by  substituting  the  sugars  of 
the  East  for  those  of  the  West,  we  should  neither  add  to  the  number  nor  deteriorate  the 
condition  of  the  existing  slave  population  in  our  dominions,  while  we  shou'd  save  above 


58 

a  million  and  a  half'm  the  purchase  of  one  of  the  principal  necessaries  of  life,  at  the 
name  time  that  we  subverted  a  system  of  monopoly  and  laid  the  foundations  of  ft  'new 
and  extensive  intercourse  with  India — a  market  which  may  he  enlarged  to  almost  any 
conceivable  extent." 

Here  is  the  key  which  unlocks  the  motives,  and  controls  and  regulates  the 
measures  and  policy  of  England.  To  encourage  and  foster  the  slave  trade,  she 
had  given  to  the  West  Indies  a  monopoly  of  the  supply  of  the  home  markef 
with  tropical  produce — the  discovery  of  the  power  loom,  the  cotton  (gin  and  the 
•spinning  jenny  had  so  increased  her  manufactures  that  it  had  become  necessary 
to  find  new  markets  for  the  sale  of  the  surplus  products  of  her  machinery,  and 
hence  she  emancipated  her  West  India  slaves,  and  opened  the  trade  of  India 
to  British  enterprise.  The  motive  is  indicated  by  historical  facts  as  well  as  by 
her  arguments.  Thus,  in  1825,  the  Edinburgh  Review  assails  the  West  India 
monopoly  upon  the  ground  that  its  repeal  would  lay  the  "foundation  of  a 
new  and  extensive  inicrcoxirse  with  Jadia — a  market  which  may  be  enlarged 
to  almost  any  conceivable  extent." 

The  appeal  to  the  pocket  nerve  of  England,  however,  prevailed,  and  as 
Wilberforce  urged,  in  18! 7,  that  the  grant  of  two  millions  of  dollars  to  in- 
duce Spain  to  abolish  the  slave  trade  would  be  more  than  repaid  by  opening 
to  England  the  commerce  of  the  continent  of  Africa,  which  could  not  be  done 
so  long  as  Spain  was  permitted  to  carry  on  the  slave  trade,  so,  in  1S33,  it 
was  argued  that  the  one  hundred  millions  of  dollars  paid  to  the  West  India 
proprietors  would  be  more  than  repaid  to  England  by  the  increased  commerce 
with  India,  which  "would  be  entirely  defeated,"  unless  the  West  India  mo- 
nopoly was  repealed  ;  and  this  could  apt  be  done  without  first  emancipating 
the  West  India  slaves  and  indemnifying  the  West  India  proprietors. 

The  prevailing  impression  in  England  then  was,  that  free  labor  was  cheaper 
than  slave  labor,  and  that  the  effect  of  opening  the  trade  of  India  would  be 
to  so  reduce  the  price  of  tropical  products  that  it  would  be  equivalent  to  the 
confiscation  of  the  West  India  estates,  and,  therefore,  the  indemnity  given 
was,  in  faer,  a  remuneration  for  the  depreciation  of  West  India  property, 
caused  by  admitting  into  the  British  market  the  cheaper  produce  of  the  East 
Indies;  and  the  emancipation  of  the  West  India  slaves  was  but  an  act  of 
justice  to  their  masters  in  remuneration  for  the  destruction  of,  the  value  of 
their  property,  and  not  an  act  of  mercy  or  of  sympathy  for  the  slaves. 

This  is  proved  not  only  by  the  fact  admitted  by  the  Edinburgh  Review,  as 
quoted  above,  that  slavery  existed  then  in  the  East  Indies,  and  continues  to 
exist  there  now,  and  is  enforced  by  the  authority  of  British  law,  but  by  the 
further  fact  that,  finding  that  the  cheap  slave  labor  of  India  cannot  successfully 
compete  with  the  slave  labor  of  America,  the  diplomatic  energies  of  England 
have  been  exerted  to  increase  the  value  of  the  tropical  products  of  India  by 
the  abolition  of  slavery  wherever  slave  labor  elsewhere  has  come  in  competi- 
tion with  the  labor  of  India.  The  war  now  waged  against  us  is  the  fruit  of 
the  abolition  movement  of  England,  and  to  arm  and  emancipate  our  slaves 
would  be  the  consummation  of  her  efforts  to  aggrandise  her  power  and  influ- 
tHiee  by  the  destruction  of  that  principle  of  our  social  and  political  organiza- 
tion which  constitutes  the  basis  of  our  strength  ami  prosperity.  It  is  admitted 
that  slavery  exists  in  India,  but  who  ever  heard  a  British  statesman  or  a 
British  press  denounce  the  slavey  of  India  ?     Why  does  England  send  her 


59 

sympathies  on  a  voyage  of  discovery  to  Africa  and  America,  instead  of  en- 
listing them  in  behalf  of  her  own  suffering  poor  in  England,  in  Ireland  and 

'India? 

That  there  may  be  no  doubt  as  to  the  motive  of  England,  I   quote  from 

iLord  Stanley  in  the  House  of  Commons  in  1842.  He  said  that  oil  sixty-two 
sugar  estates  in  the  British  West  Indies,  the  loss  from  January  to  December, 
1841,  had  been  $983,000  on  an  outlay  of  Si, 250,000  ;  and  Sir  Robert  Peel 
said,  "He  roust  say  he  had  his  doubts  if  a  colony,  in  which  slavery  had  been 
abolished  by  law,  could  at  present  enter  into  successful  competition  with  a'dis- 
feriet  in  which  the  system  continues  to  exist." 

Urged  on  by  these  convictions,  England  has  not  only  continued  slavery  in 
India,  but,  by  a  system  of  internal  police,  she  has  levied  upon  the  free  labor, 
as  well  as  the  slave  labor,  of  India  exactions  much  more  onerous  than  are  laid 
upon  our  slaves. 

McCull'ich,  speaking  of  the  revenue  and   expenditure  of  the  East  India  Company, 

i  says  :  "The  far  greater  part  of  the  revenue  of  India  is,  at  present,  and  lias  always  been, 
derived  from  the  soil.  The  land  has  been  held  by  its  immediate,  cultivators  generally 
in  small  portions,  with  a  perpetual  and  transferable  title ;  but  they  have  been  under  the 
obligation  of  making  an  annual  payment  to  the  Government  of  a  certain  portii  n  of  the 

;  prodiiGe  of  their  farms,  which  might  be  increased  or  diminished  at  the  pleasure  o  the 
sovereign,  and  which  has,  in  almost  all  cases,  been  so  large  as  seldom  to  leave  the  culti- 
vators more  than  a  bare  subsistence  Under  the  Mahomidan  Government,  the  gross 
produce  of  the  soil  was  divided,  into  equal  or  nearly  equal  shares,  between  the  ryots 
or  cultivators,  and  the  Government  We  regret  we  are  livable  to  say  that  the  Britisli 
Government  has  made  any  material  deduction  from  this  enormous  assessment.  Its  op- 
pressiveness, more  than  anything  else,  has  prevented  our  ascendancy  in  India,  and  the 
comparative  tranquility  and  good  order  we  have  introduced  from  having  the  beneficial 
effects  that  might  have  been  anticipated  The  cultivators  throughout  Hindostatmre 
proverbial  y  poor;  and,  until  the  amount  of  the  assessment  they  are  at  present  subject 
to  ba  effectually  reduced,  they  cannot  be  otherwise  than  wretched.  They  are  commonly 
obliged  to  borrow  money  to  buy  their  seed  and  cany  on  their  operations,  at  a  high  in- 
terest, on  a  species  of  .mortgage  over  the  ensuing  crop.  Their  only  object  is  to  get  sub- 
sistence— to  be  able  to  exist  in  the  same  obscure  poverty  as  their  forefathers,.  If  they 
succeed  in  this  they  are  satisfied.  Mr.  Colebrook,  whose  authority  on  all  that  relates  to 
India  is  so  deservedly  high,  mentions  that  the  quantity  of  land  occupied  by  each  ryot 
or  cultivator,  in  Bengal,  is  commonly  about  six  acres,  and  rarely  amounts  to  twfenty- 
four;  and  it  is  obvious  that  the  abstraction  of  half  the  produce  raised  on  such  patches 
can  leave  the  occupiers  noj  hing  more  than  the  barest  subsistence  for  themselves  and 
their  families.  Indeed,  Mr.  Colebrook  tell  us  that  the  condition  of  ryots,  subject  to  this 
tax,  is  generally  inferior  to  that  of  a  hired  laborer,  who  receives  the  miserable  pittance 
of  two  annas,  or  about  three  pence  a  day  wages.  Besides  the'  land  revenue,  a  consid- 
erable revenue  is  derived  in  India  from  the  monopolies  of  salt  and  opium,  the  sale  of 
spirituous  liquors,  land  and  sea  customs,  post  office,  etc.  Of  these  monopolies,  the  first 
is,  in  all  respects,  decidedly  the  most  objectionable.  Few  things,  indeed,  would  do  more 
to  promote  the  improvement  of  India  than  tiie  total  abolition  of  this  monopoly.  An 
open  trade  in  salt,  with  moderate  duties,  would,  there  cm  be  no  doubt,  be  productive  of 
the  greatest  advantages  to  the  pubLjc  and  a  large  increase  of  revenue  to  the  government; 
The  opium  monopoly,  the  less  objectionable  than  the  last,  is,  notwithstanding,  very  oppres- 
sive It  interferes  with  the  industry  of  the  inhabitants — those  who  are  engaged  in  the 
eultiration  rf  opium  being  obliged  t  >  sell  the.%%  produce  to  the  Goy&rrimtnt  at  prices 
arbitrarily  jixed  by  the  G'ompa1  y's  agents" 

Finding  that  the  labor  of  India^ould  not  compete  with  the  slave  labor  of 
America,  England,  in  1840,  negotiated  what  she  termed  her  slave  trade 
treaty,  which  was  intended  t«  be  an  amendment  to  the  law  of  nations  author- 
ising her  to  arrest,  on  the  high  seas,  any  ship  suspected  of  being  engaged  in 


k 


60 

the  slave  trade,  to  be  carried  into  British. ports  and  condemned  by  British 
Judges.  And  such  was  the  tone  of  the  British  press,  and  such  the  character 
of  British  diplomacy,  that  the  President  (Mr.  Tyler)  deemed  it  expedient  "to  J' 
send  me  as  a  confidential  agent  to  London,  where  I  spent  several  months 
writing-  a,series  of  articles  for  the  Morning  Chronicle.  From  London  I  went 
to  Paris,  and  wrote  a  series  for  the  Journal  of  Commerce.  The  ratification  of 
the  treaty  was  before  the  French  Chamber  of  Deputies.  There  was  then  a  I  ] 
slaveholding  interest  in  the  French  West  Indies.  My  arguments  were  ad- 
dressed to  that  interest  and  to  the  continental  powers  of  Europe.  I  en-  \ 
deavored  to  unmask  the  purpose  of  England,  and  to  show  that  the  emancipa- 
tion  of  American  slaves  would  enable  England  to  exchange  her'  manufactures 
for  the  tropical  products  of  India,  which  products  she  would  then  sell  to  con- 
sumer's on  the  continent  at  much  higher  prices  than  would  otherwise  be 
paid  to  the  American  producers.  I  urged  and  aided  General  Cass  to 
write  his  protest  against  the  ratification  of  the  treaty.  My  articles  were  re- 
produced in  the  French  Chamber  of  Deputies.  They  were  translated  and 
circulated  in  Germany,  and  the  ratification  of  the  treaty  was  defeated. 

Whilst  in  Paris  I  had  a  free  and  confidential  conversation  with  one  of  the 
leading  diplomatists  of  England  (Sir  Henry  Ellis),  to  whom  I  urged  the  ne- 
cessity of  an  early  and  satisfactory  adjustment  of  the  issues,  then  pending 
with  the  United  States,  as  the  only  means  of  preventing  a  combination  be- 
tween the  United  States'and  Russia,  and  other  leading  powers  of  Europe,  for 
the  purpose  of  emancipating  the  British  East  Indies,  and  opening  the  com- 
merce of  India  to  all  the  world.  He  urged  me  to  write  out  the  substance  of 
my  remarks  for  him,  saying  that  he  wished  to  send  them  to  Lord  Aberdeen. 

•I  found  it  impossible  to  p  epare  a  communication  sufficiently  respectful  to 
be  submitted  to  His  Lordship,  and,  instread,  wrote  an  article  giving  extracts 
from  the  official  reports  of  the  poor  law  commissioners,  proving  the  condition 
of  the.  laboring  poor  of  Ireland  and  Eng'and  to  be  much  Yno:e  degraded  than 
that  of  our  slave-,  and  charg  ng  that  the  purpose  of  England  was  to  substi- 
tute the  tropical  products  of  India  for  thnse  of  America,  and  that  having  by 
her  experiment  in  the  West  Indies  ascertained  that  the  cheap  labor  of  India 
could  not  succe-sfully  compete  with  the  slave  labor  of  America,  her  efforts  to 
abolish  the  s'ave  trad«  and  to  emancipate  African  slaves  were  prom. .ted  by 
the  hope  that  if,  under  the  pretence  of  sympathy  for  the  slave,  she  could  ac- 
complish this,  then  she  could  obtain  tropical  produce  from  the  East  Indies  in 
exchange  for  her  manufactures,  andtthus  levy  tribute  on  the  consumers  of 
East  India  produce  at  the  same  tim°,  that  by  the  monopoly  of  the  trade  to 
India  she  could  greatly^' increase  her  manufactures,  her  shipping  and  her  navy- 
That  such 'is  her  purpose,  I  proceed  to  quote  authorities  which  place  the  mat- 
ter beyond  questiou  :  % 

THE    DUKE    OF    "WELLINGTON. 

In  the  debate  on  the  Corn  Laws  in  1842,  the  Duke  of  Wellington  said  : 
I  am  sure  no  man  laments  more  than' I  do  ttiat  commerce  of  manufactures  should  b# 
at  all  depressed  ;  but  I  believe  if  the  Lorn  Laws  were  rep  -aled  to-morrow,  not  a  yard  of 
cloth  or  a  pound  of  iron  more  would  be  sold  in  ajhy  part  of  Europe  or  of  the  world,  over 
■which  this  country  does  not  exercise  a  control.  My  Lord*,  the  greatest  number  of  Euro- 
pean nations,  and  of  the  nations  of  the  globe,  have  ad<^>ted  measures  f  >r  the  encourage- 
ment of  home  manufactures.  These  measures  were  not,  as  stated  by  some,  taken  in 
consequence  of  the  English  Corn  Laws.     They  are  attributable  to  the  example  of  this 

« 


61 

ountrv.     They  had  their  rise  in  the  spectacle  which  this  country  exhibited  during  the 

iite  war,  and  in  the  great  and  noble  exertions  by  which  her  power  and  strength  were 
isplayed  on  every  occasion.  Those  who  contemplated  these  exertions,  as  well  as  those 
idio  were  relieved  and  assisted  by  them,  thought  they  might  as  well  follow  the  example 
f  our  power,  of  our  industry,  and  our  system  of  commerce.     They  have  followed  our 

'sample,  and  have  established  among  themselves  manufactures,  and  given  a  stimulus 

jo  their  commerce. 

LORD    PALMER8TON. 

1  In  the  debate  on  the  state  of  the  country,,  on  the  Oth  July,  1842,  Lord 
*almerston  having  explained  that  the  markets  of  France  and  Germany  were 
Josed  to  British  manufactures,  said  : 

I  therefore  look  to  more  distant  regions  for  future  prosperity.  "We  must  look  to  the 
isin"-  nation  which  inhabits  the  'North  American  continent.  There  we  are  met  by  our 
vorn  Laws,  and  until  we  alter  these  Ave  will  be  crippled  in  our  commercial  intercourse. 
iWe  must  look  also  to  South  America.  There  again  we  are  met  by  heavy  duties  on 
?ugar,  ahd  until  these  are  modified  we  cannot  expect  to  carry  on  commerce  with  South 
America  to  the  extent  it  is  possible.  We  must  look  again  to  Africa,  and  we  must  look 
specially  to  India  and  to  China. 

MR.     COBDEN. 

That  the  animus  which  governs  the  measures  and  policy  of  England  may 
oe  better  understood,  I  quote  from  a  pamphlet  written  in  1835  by  Mr.  Cob- 
leu.     He  says : 

We  are  on  the  eve  of  a  novel  combination  of  commercial  necessities  that  will  al- 
o<*ether  change  the  relation  in  which  we  have  hitherto  stood  with  our  colonies,  tv.e 
all  them  necessities;  they  will  be  forced  on  us.  not  from  our  conviction  of  the  wisdom 
if  such  change-,  but  by  the  irresistible  march  of  events.  The  new  world  is  destined  to 
)ecome  the  arbiter  of  the  commercial  policy  of  the  old.  '-  *  *  It  is  to  the  indus- 
try1, the  economy  and  peaceful  policy  of  America,  and  not  to  the  growth  of  liussia,  that 
>ur  statesmen  and  politicians,  of  whatever  creed,  ought  to  direct  their  most  anxious 
study;  for  it  is  by  these  and  not  by  the  efforts  of  barbarian  force  that  the  power  and 
rreatness  of  England  are  in  danger  of  being  superceded;  yes,  by  the  successful  rivalry 
jf  America  shall  we  in  all  probability  be  placed  second  in  the  rank  of  nations.    •"•     *     * 

Bearing  in  mind  that  the  supply  of  the  raw  mUerial  of  nearly  one  half  of  our  ex- 
ports is  derived  from  a  country  that  threatens  to  eclipse  us  by  its  rival  greatness,  we 
cannot,  whilst  viewing  the' relative  position  of  England  and  the  United  States  at  this 
mordent,  refrain  from  recurring  to  the  somewhat  parallel  cases  of  Midland  and  Great 
Britain  before  the  latter  became  a  manufacturing  State. 

*  *  *  The  latter  (England)  now  see<  in  America  a  competitor  in  every  respect 
calculated  to  contend  with  advantage  for  the  sceptre  of  naval  and  commercial  supre- 
macy. , 

FRAZER's    MAGAZINE    RECOMMENDS    SERVILE    WAIt. 

In  1841  Frazer's  Magazine  published  an  article  headed  "  War  with  America 
a  blessing  to  mankind,"  in  which,  after  laboring  to  enforce  the  propriety  of  a 
declaration  of  war  by  England,  and  the  necessity  of  making  a  war  subservi- 
ent to  the  great  and  permanent  object. of  freeing  our  slaves,  he  says  :  "Policy 
mot  less  than  philanthropy  prescribes  such  a  course  of  warfare,"  and  adds: 

In  one  morning  a  force  of  ten  thousand  men  could  be  raised  in  Jamaica  for  the  en- 
franchisement of  their  brethren  in  America.  Such  a  force,  supported  by  two  battalions 
of  Englishmen  and  20,' '00  muskets,  would  establish  themselves  in  Carolina,  never  to  be 
removed.  In  three  weeks  from  their  appearance,  the  entire  South  would  be  in  one  con- 
flagration. The  chains  of  a  million  of  men  would  be  broken,  and  by  what  power  could 
they  ever  again  be  nvetted?  We  say  that  this  course  is  dictated  alike  by  self-preserva- 
tion and  by  philanthropy. 

It  will  thus  be  seen  that  the  programme  of  the  invasion  of  Virginia  by 


62 

John  Brown,  and  the  Federal  scheme  of  a  servile  war,  originated  in  England. 
Even  now,  Earl  Russell  and  Mr.  Lindsay  both  declare  that  if  England'could 
be  satisfied  that  the  purp  se  of  the  Federal  Government  is  to  emancipate  our 
slaves  then  the  sympathy  of  England  would  be  with  the  North.  And  whv 
docs  England  wish  to  emancipate  our  slaves?  It  is  because  she  believes  that 
then  the- cost  of  producing  cotton,  rice  and  sugar  in, America  would  be  so 
much  increased  that  her  cheap  labor  in  India  could  drive  the  American  cot-  ' 
ton,  sugar  and  rice  out  of  the  market. 

SIR-  ROBERT    PEEL. 

The  debate,  in  1842  on  the  proposition  to  repeal  the  tax  on  Cuban  and 
Brazilian  sugar,  Sir  Robert  Peel  said  : 

To  open  our  markets  to  the  sugars  of  Cuba  and  Brazil  would  detract  from  the  high 
character  this  country  (England)  has  acquired  hi  its  efforts  and  sacrifices  to  put  down  the 
slave  trade.  *  *  *  What  I  say  is,  make' the  attempt— try  to  get  concessions  ftvm 
those  of  whom  we  get  our  supply — those  countries  themselves  are  in  a  peculiar  position. 
You  may  depend  upon  it  that  there  is  a  growing  conviction  among-  the  people  of  those 
countries  that  slavery  is  not  unaccompanied  with  great  dangers.  In  Cuba,  Brazil,  and  in 
the  United  States,  there  is  a  ferment  on  the  subject  of  slavery  which  is  spreading  and 
will  spread.  Some  from  humane  and  benevolent  motives — some  on  account  of  interest- 
ell  fears,  begin  to  look  at  the  great  example  we  have  set,  and  begin  to  look  at  the  conse- 
ouences  which  may  result  from  that  example  nearer  home. 

This  speech  was  made  in  opposition  to  a  proposition  to  repeal  the  duty  on 
Cuban  and  Brazilian  sugar,  based  upon  a  petition  which  alleged  that  the  tax 
on  these  sugars  was  $-1 7,085,7 15  per  annum.  The  argument,  interpreted, 
was  "i'pay  this  tax  a  little  longer  and  I  will  soon  be  able  to  induce  Cuba  and 
Brazil  to  abolish  slavery,  and  then  the  United  States  will  follow  their  ex- 
ample," for,  said  he  in  addition:  "It  is  impossible  to  look  to  the  discussion  in 
the  United  Stales,  and  especially  to  the,  conflicts  between  the  Southern  and 
the  Northern  States  without  seeing  that  slavery  in  that  nation  stands  on  a 
precarious  footing."  And  why  should  Sir  Robert  Peel  urge  the  people  of 
England  to  continue  to  pay  a  i.a<c  of  $47, 085, 7 15  per  annum,  nnderthe  hope 
that  it  would  aid  in  the  emancipation  of  our  slaves  'i  In  the  same  debate  he 
said  : 

1  must  say  that  I  have  my  doubts  if  a  colony  in  which  slavery  has  been  abolished  by 
law  can,  at  present,  enter  into  competition  with  a  district  in  which  the  system  continues 
to  exist.  • 

And  Lord  Stanley,  then  a  member  of  the  Government,  said  that,  Qn  .si^ctv- 

two  West  India  sugar  estates,  from  the  1st  of  January  to  PeceiiioeK'lSii, ;  th/e 

actual  loss  to  the  proprietors  was  8983,000  on  an  outlky. oH^MpOO'-doilar-si  :' 

ihese  extracts  prove  that  .      ■  , 

1  -ifi-s'j  io.lyoido  inwmim&q  ban  iRQT%  otlJ  od  Jay 

THE    CHEAP    LABOR    OF    INDIA  '  CANXOT    COMPETE.  WITH  ,£}LAiVE    I+ABOB.         ,.,. 

The  Government  and'pedrjfe'of  England,. ,ha,y,e.  become. .s,a.ti&fiefj.(tj,tat  cjiea-g 
as  the  labor  of  India  is,  ft  c^tir^^^  ihej'shivWlaboivlGti;',"! 

Arper' 
thSo 


Jv^r1; '■-Vv'ealtft  Wnd^isbiiVceV  of  England.  "  .^qoia'in^fixlr 

[n  proof  of  this  I. quote  farther  from  Sir  Robert  Peel.,.,  ilc,,spid,;, 
,^he"  norrorable'merhber  for  Montrose  announced  his  wish  to  maintain  our  < 


Ij  iiiw  Jl 
colonial  de- 


63 

• 

nmdencies,  but  said  that  his  object  was  to  see  each  colony  paying  for  itself.  I  appre- 
hend that  the  proposal  of  the  honorable  and  learned  membei  from  Hath  to  admit  an 
unlimited  competition  with  slaves  possessing  colonies  is  not  the  way  to  insure  that  ob- 
ject. The  honorable  member  said  that  if  the  weavers  of  I  an-,  ashne  were  asked  what 
benefit  they  derive  from  the  du'y  on  foreign  sugar,  they  will  assu  edly  say — "none." 
But  i  put  it  to  the  honorable  member  whether  that  is  the  lest  by  which  any  great  ques- 
tion affecting  this  country  is  to  be  decided  '«.  if  I  ask  a  Lancashire  weaver  what  benefit 
he  derives  from  Jamaica,  and  his  reply  is — "none,"  ought  that  to  induce  me  to  abandon 
my  measure  i  Is  the  honorable  gentleman  prepared  to  test  the  advantages  derived  from 
our  connexion  with  India  in  the  same  manner?  or  should  we  abandon  our  colonial  depen- 
dencies altogether,  upon  the  assurance  of  a  distressed  weaver  of  Lancashire,  that  he  is 
not  aware  that  any  benefit  is  conferred  upon  this  country  by  our  dependencies  ?  If  that 
is  the  principle  of  the  honorable  gentleman,  it  i<  quite  clear  th  t  in  order  to  conform  to 
it,  we  must  resolve  ourselves  into  the  narrow  limits  of  our  own  resources  and  try  what 
England  can  do  against  the  world,  after  having  abandoned  all  those  dependencies  which 
she  has  established  to  her  glory. 

Yes,  Enoiand,  under  pretence  of  benevolence,  would  pay  a  tax  of  forty- 
seven  millions  of  dollars,  under  a  hope  that,  by  the  emancipation  of  our 
slaves,  she  could  drive  us  out  of  the  market,  and  then  she  would  bind  the 
poor  East  Indians  to  the  muzzle  of  her  cannon,  and  shoot  them  into  frag- 
ments, by  way  of  compelling  India  to  exchange  her  raw  products  for  British 
manufactures,  because  she  hopes,  by  such  means,  to  monopolize  the  greater 
part  of  the  trade  in  tropical  produce  and  thus  increase  her  power  and  re- 
sources. Is  it  not  obvious  that  for  this  she  repealed  the  duties  favoring  West 
India  produce,  emancipated  the  West  India,  slaves,  and  opened  the  trade  ot 
India  to  British  subjects?  Is  it  surprising  that  she  refuses  to  recognize  the 
Confederate  States  ?  • 

BRITISH    POOR    LAWS. 

Before  the  act  of  1833,  any  English  laborer,  whose  wages  were  not  suffi- 
cient to  maintain  him  and  his  family,  was  entitled  to  receive  such  an  allow- 
ance from  the  poor  rates  as  would  make  the  sum  requisite  for  their  support. 
This  was  termed  "out  door  relief,1'  and  could  be  claimed  only  by  those  who 
were  settled  in  the  parish.  To  obtain  a  settlement  required-  that  an  applicant 
should  have  been  born  in  the  parish,. or  have  been  in  service  twelve  months, 
or  the  owner  of  a  freehold  worth  ten  pounds  per  annum. 

The  Edinburgh  Review  for  May,  1828,  quotes  a  member  of  the  House  of 
pommons,  who  said  : 

This  forced  and  expensive  way  of  relieving  the  poor  has  put  many  gentlemen  and 
'  parishes  upon  contriving  all  possible  methods  of  lessening  their  number,  particularly  by 
discouraging,  and  sometimes  hindering,  poor  Persons  from  marrying,  when  they  appear 
likely  to  become  chargeable,  and  thereby  preventing  an  increase  of  useful  laborers,  by 
discharging  servants  in  their  last  quarter,  and  preventing  them  from  getting  a  settle- 
ment, whereby  they  become  vagrants — by  pulling  down  cottages  and  suffering  no  places 
of  inhabitation  for  paupers,  whereby  estates  are  flung  into  a  few  hands,  and  several 
parishes  are,  in  a  measure,  depopulated.  England  complains  of  a  want  of  useful  hands 
for  agriculture,  manufactures,  for  the  land  and  sea  service ;  and,  for  remedyiug  this,  a 
bill  for  a  general  naturalization  was  lately  introduced.  *  *  *  But  no  scheme,  I  be- 
lieve, will  ever  succeed  so  long  as  parishes  are  so  apprehensive  of  paupers,  and  take  all 
manner  of  precaution  to  prevent  a  multiplication  of  inhabitants. 

Again,  from  Arthur  Young : 

There  is  no  parish  but  had  much  ratl«r  that  its  youDg  laborers  would  continue  single ; 
in  that  state  they  are  not  in  danger  of  becoming  chargeab'e;  but  when  married  the  case 
alters.     All  obstructions  are,  therefore,  thrown  in  the  way  of  .their  marrying  ;  and  none  s 


64 

more  immediately  than  that  of  rendering  it  as  d.fficult  as  possible  for  the  men,  'when 
married,  to  procure  a  house  to  live  in;  and  this  conduct  is  found  so  conducive  to  easing 

ike  rates,  that  it  universally  (jives  rise  to  an  ojie.n  war  against  cottages 'i  he 

Act  of  43d  Elizabeth,  by  devolving  the  proteciion  of  the  poor  on  the  landlords  and  occu- 
piers of  land,  compelled  the  latter  to  take  all  possible  precautious  to  prevent  the  too 
rapid  increase  of  the  i'ortner.  A  premium  was  given  to  those  who  lived  in  a,  state  of 
celibacy;  early  and  improvident  marriages  were  discouraged  by  what  could  not  fail  to 
be  considered  very  severe  penalties. 

The  Review  adds  : 

The  able-bodied  tenant  of  a  workhouse  should  be  made  to  feel  that  his  situation  is 
decidedly  less  comfoi table  than  that  of  the  industrious  laborer  who  supports  himself, 
and  that  a  life  of  unremitting  toil,  supported  on  coarse  and  scanty  fare,  is  to  be  his  por- 
tion so  long  as  he  continues  in  this  degraded  state. 

It  adds  further : 

Dr  Burn,  who  is  one  of  the  very  highest  authorities  as  to  all  that  respects  the  poor, 
has  given  the  following  graphical  de  iueation  of  the  peculiar  business  of  a  parish  over- 
seer: The  office  of  an  overseer  of  the  poor  seems  to  be  understood  to  be  this:  To  keep 
an  extraordinary  lookout,  to  prevent  persons  coming  to  inhabit  without  cytificates,  and 
to  fly  to  the  Justices  to  remove  them  ;  and  if  a  man  brings  a  certificate,  tlu-n  to  caution 
the  inhabitants  not  to  let  him  a  farm  of  £10  a  year,  and  to  take  care  to  keep  him  out  of 
all  parish  offices.  To  wain  them,  if  they  will  hire  servants,  to  hire  them  by  the  month, 
the  week,  or  the  day,  rather  than  by  any  way  that  can  give  them  a  settlement;  or.  if 
ihey  do  hire  them  for  a  year,  then  to  endeavor  to  pick  a  quarrel  with  them  belore  tk« 
rear's  end,  and  so  to  get  rid  of  them;  to  maintain  their  poor  as  cheaply  as  they  possi- 
bly can,  and  not  to  lay  out  two  pence  in  prospect  of  any  future  good,  but  only  to  serve 
the  present  necessity  ;  (o  bargain  with  some  sturdy  person  to  take  them  by  the  lump, 
who  is  not  yet  intended  to  take  them,  but*)  hang  over  them  in  lerrora/i,  if  they  shall 
eoniplain  to  the  justice  for  want  of  maintenance;  to  send  them  out  into  the  country  a 
begging;  to  bind  out  poor  children  apprentices,  no  matter  to  whom  or  to  what  trade, 
but  to  take  special  care  that  the  master  live  in  another  parish;  to  move  heaven  and 
earth,  if  any.  dispute  happens  about  a  settlement;  and,  in  that  particular,  to  invert  the 
general  rule  and  stick  at  no  expense ;  to  pull  down  cottages  ;  to  drive  out  as  many  £m- 
Itabitdnts,  and  admit  as  few,  as  they  possibly  can — that  is,  to  depopulate  the  parish  in, 
order  to  lessen  the  poor  rate;  to  be  generous  indeed  sometimes  in  giving  a  portion  with 
the  mother  of  a  bastard  child  to  the  reputed  father, on  condition  that  he  will  marry  her: 
>V  with  a  poor  widow,  always  prbvided  that  the  husband  be  settled  elsewhere;  or,  if  a 
poor  man,  with  a  large  family,  happen  to  be  industrious,  they  will  charitably  assist  him 
m  taking  a  farm  in  some  neighboring  parish,  and  give  him  £10  to  pay  his  arst  year's 
rent  with,  that  they  may  thus  for  ever  get  rid  of  him  and  his  progeny. 

The  lleview  quotes  the  Morning  Chronicle  as  saying: 

These  restraints  which  persons  of  property,  interested  in  putting  down  poor  rates,  will 
infallibly  impose,  are  much  more  likely  efficacious  than  tho-ejie  (the  laborer)  will  im- 
pose on  himself  Until  lately,  no  pauper  could  marry,  and  no  pauper  ought  to  be  allowed 
io  marry.  If  there  was  no  •  pening  for  a  married  man  in  his  own  parish,  and  if  the  at- 
tempt to  marry  in  another  led  to  his  removal  as  a  pauper,  the  laborer  found  himself 
governed  by  circumstanc.es  to  which  his  inclinations  w  ere  forced  to  yield. 

So  much  for  the  Edinburgh  Review. 

The  London  Quarterly,  of  December,  1832,  says:  ' 

1st.  The  able-bodied  laborer  must  be  discouraged  from  relying  on  parish  aid.  2d. 
He  must  be  enabled  to  maintain  himself  in  independence.  The  first  end  is  to  be  attained 
only  by  requi  ing  i'rcnj  all  parish  laboiers  fidl  icorh  for  a  rale  of  pay  barely  sufficient 
to  support  the  individuals.  A  mere  sul.si.->tence,  in  return  for  their  utmost  exertions,  is 
all  i  hat,  injustice  or  policy,  the  parish  can  or  ^night  to  be  compelled  to  afford  them. 
Harshly  as  this  may  sound,  ic  is  absolutely  necessary,  to  prevent  our  degenerat;ng  into 
a  nation  of  paupers,  that  the  parish  should  always  have  the  character  of  the  hardest  tat/' 
■matters,  and  the  worst  pay-master  a  laborer  can  apply  to. 


'65 

*  ■ 

It  will  be  seen  that  the  system  is  so  organized  as  to  compel  the  able-bodied 
laborer  to  work,  and  to  reduce  the  compensation  below  the  point  of  subsis- 
tence. The  Review  gives  the  following  as  the  pay  allowed  to  infirm  poor  in  a 
county  in  the  west  of  England  per  week  : 

To  every  adult  pauper,  -------  3s.  Od- 

Infirm  paupers  under  18  and  above  10  years  of  age,        -  -  -  -    2s.  Od- 

Children  under  10  yearsof  age,  -  -      v      -  -  -  -  Is.  3d- 

PAY   OF   PARISH    LABORERS    PER   WEEK; 

Single  man,        -  .    "    •            -            -            -            -  -            -                   3s.  Od 

Man  with  a  wife,       -            -            -            -            -    .  -            -            -             5s.  Od' 

Young  men  and  women  under  18  and  above  12  years,  -            -                   2s.  Od. 

Single  women,          -           -            -            -            -    .  -            -            -             2s.  6d, 

For  each  child  incapable  of  work,          -            -            -  -            -                     Is.  3d. 

Boys  and  girls  under  12  years  of  age,          -            -  -            -            -              Is.  6d  ; 

The  Edinburgh  Review  says  that  it  has  been  "affirmed,  and  truly,  that- 
there  was  no  considerable  increase  of  population  in  England  from  the  period 
when  the  poor  laws  were  first  established  (1601)  up  to  the  middle  of  the  last 
century  ;  and  it  is  alleged  that  its  recent  increase  has  been  wholly  owing  to 
the  prodigious  extension  of  manufactures  and  commerce;"  and  the  London 
Quarterly,  of  March,  1826,  says: 

/  We  are  inclined  to  suspect  that  in  all  agricultural  districts  the  population  suffered  a 
diminution  by  no  means  inconsiderable  during  this  interval  (from  1550  to  1750).  For 
the  purpose  of  investigating  this  point,  we  have  consulted  a  variety  of  parish  registers, 
considering  these  as  the  most  certain  sources  of  authentic  data  for  forming  an  opinion 
on  the  subject.  The  register  book  of  the  parish  in  which  we  are  now  writing  com- 
mences about  1550.  On  an  average  of  fifty  years,  the  number  of  baptisms  annually  en- 
tered in  it  stands  thus :   . 

From  1550  to  1600,  50  per  annum. 

From  1600  to  1650,  53  per  annum.  . 

From  1650  to  1700,  34  per  annum. 

.From  1700  to  1750,  19  per  annum. 

From  1750  to  1800,  19  per  annum.  .         • 

From  180(J  to  1824,  34  per  annum. 

There  is  nothing  peculiar  either  in  tbe  situation  or  circumstances  of  this  parish.  It  is 
situated  in  a  country  purely  agricultural,  near  one  of  the  main  public  roads,  and  at  no 
great  distance  from  the  Metropolis.  The  land  is  divided  into  -iarnis  of  very  moderate 
dimensions,  and  a  considerable  portion  of  it  Is  copyhold,  a  circumstance  forming,  at  all 
times,  a  powerful  impediment  to  the  demolition  of  houses  of  husbandry  and  the  consoli- 
dation of  farms. 

•  ■* 

The  laboring  poor,  under  the  regulation  of  the  wages  of  labor,  in  England, 

have  not  increased  in  these  agricultural  districts  for  more  than  two  hundred 
years;  whilst,  under  our  system  of  slave  labor,  the  four  hundred  thousand  Afri- 
can slaves  brought  to  this  country  by  the  Yankees  have  increased  to  more  than 
four  millions  in  less  than  one  hundred  years.  Could  there  be  a  stronger  or 
more  satisfactory  test  of  the  two  systems  ? 
5 


66 


APPENDIX  rA. 


It  -will  be  seen  by  what  I  have  written,  that  I  am  enabled  to  trace  the 
Abolition  movement  of  the  North  to  the  purpose  of  organizing  the  North 
as  a  sectional  political  party,  upon  tie  basis  of  emancipating  our  slaves, 
digested  by  Mr.  Adams,  as  far  back  as  1815,  in  concert  with  British  Aboli- 
tionists. I  refer  to  this  fact  now,  and  to  the  efforts  which  I  have  hereto- 
fore made  to  arouse  the  people  of  the  slaveholding  States  to  the  necessity 
of  counteracting  the  Northern  sectional  organization,,  and  that  up  to  the 
election  of  Mr.  Lincoln,  I  did  not  despair  of  preserving  the  Union  by  re- 
straining the  action  of  .the  Federal  Government  within  the  limits  of  the 
powers  granted  by  the  Federal  Constitution,  In  proof  of  this,  I  refer  to, 
the  explanation  which  I  have  given  of  the  Nullification  of  South  Carolina, 
to  which  I  would  add  an  appeal  which  I  made  to  the  people  of  the  slavehold- 
ing States,  in  1850,  given  in  this  appendix  below.  '  I  would  refer  now  to 
tb,e  fact  that  the  Federal  Government  was  organized  by  the  States  as  States, 
and  that  that  Government  has  no  powers  but  those  granted  by  the  Consti- 
tution, and  that  the  question  of  slavery  was  expressly  reserved  to  the  States. 
The.  purpose  of  the  North  is  dominion,  power.  If  it  were  possible  for 
them  to  subjugate  the  South,  then,  instead  of  independent,  or  co-equal 
States,  we  will  be  subjugated  colonies,  and  the  fate  of  Ireland,  and  of  India, 
and  of  the  pauper  population  of  England,  should  admonish  us  of  what  our 
condition  will  then  be. 

The  following  address  was  published  in  1 850.  It  will  be  seen  that  it 
contemplated  th0  possibility  of  preserving  the  Union.  He  who  desires  a 
reconstruction  must  be  deaf  to  all  the  teachings  of  history. 

TO  THE  PEOPLE  OF  THE  SLAVEHOLDING  STATES. 

The  Jews  were  a  peculiar  people,  chosen  of  God,  and  under  Hit- 
guidance  and  protection,  until,  as  a  punishment  for  their  sins,  He 
permitted  Samuel  to  anoint  Saul  to  be  their  King.  As  in  His  good- 
ness and  mercy,  under  the  Mosaic  dispensation,  God  committed  the 
Ark  of  the  Covenant  to  their  keeping,  so  has  "He,  in  like  manner, 
committed  to  the  slaveholding  race  of  this  favored  country,  the 
maintenance  and  preservation  of  our  Republican  institutions:  How 
is  this  to  be  done  ?  God  requires  that  ma,n  should  labor.  "Idleness 
is  Sinful,  and  will  surely  be  punished.     Neither  health,  strength. 


•  ft 

power,  intelligence,  wealth,  or  influence,  can  be  preserved  without 
labor.  We  must,  therefore,  meet  the  issues  involved  in  the  present 
crisis,  investigate  their  origin  and  progress,  and  prepare  with  a 
united  energy  for  the  defence  of  ourrights  and  interests. 

We  are  told  that  What  was  written  aforetime  was.  "  written  fbr 
our  learning,  that  we,  through  patience  and  comfort  of  the  Scrip- 
tures might  have  hope."  Christ  Himself  said,  "  Search  the  Scrip- 
tures, for  in  them  ye  think,  ye  have  eternal  life,  and  they  are  they 
which  testify  of  me."  He  wrought  miracles  because  it  was 'part  ©f 
His  divine,  mission  to  convince  his  immediate  disciples  and  the  world, 
that  He  was  the  Son  of  God,  having  power  to  save  sinners ;  but  He 
Himself  appealed  to  the  Prophets,  because/  their  words,  verified  by 
their  fulfillment  in  subsequent  ages,  are  so  many  living  witnesses', 
appealing  to  the  judgments  and  consciences  of  men,  confirming  the 
truth  of  Eevelation.  Indeed,  the  prophecies  concerning  the  destruc- 
tion of  Jerusalem — the  character,  dispersion,  persecution,  and  pre- 
servation of  the  Jews — the  desolation  to  'befall  Judea,  Amnion, 
Moab,  Idumea,  Philistia,  Ninevah,  Babylon  and  Tyre,  testify  unto' 
us,  who  live  in  this  enlightened  age,  that  the  Scriptures  are  true, 
With' even  greater  force  than  the  miracles  wrought  in  the  presence 
of  His  immediate  followers  by  our  Saviour  himself ;  for  our  know- 
ledge of  those  miracles  depends  upon  the  testimony  of  those  who 
bore  witness  of  them,  whereas  the  literal  fulfilment  of  the  prophe- 
cies are  constantly  proclaiming,  in  language  which  no  one  can  deny, 
that  the  Scriptures  are  true.  We  then  turn  to  the  Scriptures  and 
find  that  God  said  unto  Adam,  "  Because* thou  hast  hearkened  unto 
the  voice  of  thy  wife,  and  hast  eaten  of  the  tree  of  which  I  com- 
manded thee,  saying,  thou  shalt  not  eat  of  it ;  cursed  is  the  ground 
for  thy  sake,  in  sorrow  shalt  thou  eat  of  it  all  the  days  of  thy  life ; 
thorns  and  thistles  shall  it  bring  forth  to  thee,  and  thou  shalt  eat  of 
the  herb  of  the  field  ;  in  the  sweat  of  thy  face  shalt  thou  eat  bread, 
until  thou  return  unto  the  ground,  for  out  of  it  thou  wast  taken  ;  for 
dust  thou  art  and  unto  dust  shalt  thou  return." 

We  thus  see  that  God's  decree  is,  tba's  man  must  labor,  and  that 
no  one  is  exempt  therefrom.  He,  therefore,  who  complains  that  the 
African  is  made  to  work,  arraigns  the  wisdom,  goodness,  and  justice 
of  God  himself.  •  Are  we  told  that  the  complaint  is  .not  that  the  Afri- 
can is  made  to  work,  but  that  he  is  a  slave  ?  We  find,  that  the  first 
prophecy  after  the-flood  was  by  Noah,  in  these  words  :  "  Cursed  be 
Canaan,  a  serv/irit  of  servants  shall  he  be  unto  hi3  brethren.  Blessed 
be  the  Lord  God  of  Shem,  and  Canaan  shall  be  his  servant.  God 
shall  enlarge  Japheth,  and  he  shall  dwell  in  the'  tents  of  Shem,  and 
Canaan  shall  be  his  servant." 

God  is  not  controlled  by  accidents.  He  has  a  wise  and  beneficent 
purpose  in  all  that  He  does.  He  made  the  earth,  the  fowls  of  the 
air,  the  beasts  of  the  field,  the  fish  of  the  "sea,  and  the  man  "  to  have 
dominion  over  them."  He  made  the  climates  and  the  seasons,  and 
intended  that  each  should  act  its  part  in  the  great  purpose  of  crea- 
tion.    He  madp  the  lands  within  the  tropics  produce,  in  great  abun- 


•  6S  . 

dance,  articles  indispensable  to  the  comfort  and  happiness  of  man- 
He  gave  to  the  descendants  of  Ham  a  physical  organization  and 
constitution  which  enable  them  to  endure  the  exposure  and  fatigue, 
"without  which,  the  rich' lands  of  that  climate  cannot  be  brought 
under  "the  dominion  of  man;'''  and  yet,  although   no  one  who   be- 
lieves the  Scriptures  can  deny,  that  the  purpose  of  God  was,  that  man 
should  subdue  the  earth,  all  must  admit,  that,  without  the  aid,  the 
guidance,  and  control  of  the  Christian  white  man,  who,  for  want  of 
a  like  physical  organization  "and  constitution,  cannot  labor  under  a 
tropical  sun,  the  savage  African,  endowed  as  he  is,  and  otherwise 
qualified  for  the  task,  never  would  put  the  fairest  and  most  produc- 
tive part  of  the  habitable  globe  under  cultivation.    And  the  fact  that 
the  most  powerful  combination  ever  witnessed  in  the  civilized  world, 
acting  in  the  name  Of  religion  and  humanity,  cannot  suppress  the 
slave  trade,  should  admonish  us  that  God  has  a  purpose  to  accom- 
plish through  African  slavery.     And  who  can  now  doubt  what  that 
purpose  is  ?     Look  upon  Africa,  and  what  do  we  see  ?     A  vast  conti- 
nent teeming  with  an  idolatrous  population,  unable  to  subdue  the 
earth,  or  otherwise  fulfill  the  great  end  of  their  creation.    God  works 
by  means  that  He  may  accomplish  His  purpose.     What  has  He  clone 
through  African  slavery?     Has  he  not  brought  millions  of.benighted 
savages  to  dwell  under  the  droppings  of  His  sanctuary?    Has  He 
not  given  them  the  blessings  of  the  Gospel,  and  greatly  improved  the 
condition,  physical,  temporal  and  spiritual,'  of  the  savage  African  ? 
.Compare  His  way  with  the  ways  of  man.     He  arrests  the  savage  in 
the  midst  of  superstitious  idolatry,  and,  by  force,  places  him  under 
the  protection  of  Christian  laws,  and  within  the  infiuenee  of  the 
Christian  religion,  and  has  thus  brought  millions  to  a  knowledge  of 
the  truth.     Now,  how  doth  man  work  ?     Where  are  the  fruits  of  his 
labor?    Where  are  the  African  souls  whorn  he  hath   saved?     How 
many  heathen  have  those  who  denounce  African  slavery  converted 
to  God  ?     Verily,  by  their  works  will  they  be  judged. ' 

Who  that  looks  over  the  habitable  globe,  and  reflects  upon  the 
purposes  of  God,  as  indicated  by  the  wants,  necessities,  habits,  con- 
dition and  history  of  men,  can  believe  that  the  lands  within  the 
tropics  are  to  be  occupied  by  savages,  beasts  of  prey  and  venomous 
reptiles  ?  And  who  that  is  not  mialed  by  a  false  philanthropy,  can 
believe  that  these  lands  can  ever  be  brought  under  man's  dominion, 
so  as  to  contribute  their  due  share  to  man's  comfort  and  happiness, 
in  any  otherwise  than  that  by  the  labor  of  Africans,  regulated  and  di- 
rected by  the  intelligence  and  perseverance  of  white  men  ? 

It  will  thus  be  seen  that  African  slavery  was  intended  by  an  all- 
wise  Providence  to  promote  our  happiness  and  prosperity ;.  and  that 
He  had  this  end  in  view  when  He  placed  the  black  race  under  the 
control  of  the  greater  intelligence  of  the  white,  and  made  it  the  duty  j 
and  interest  of  the  Christian  master  to  protect,  educate,  civilize  and 'a 
Christianize  the  slave.     This  institution  has  been  assailed — a  combi-  ] 
nation  more  powerful  than  any  other  formed  upon  earth  is  arrayed 
against  it,  and  we  alone  are  left  to  defend  it. 


69 

The  press  and  the  pulpit  are  the  great  elements  of  modern  power. 
We  are  assailed  through  the  press  and  the  pulpit,  and  through  the 
press  and  the  pulpit  we  must  be  defended;  we  must  convince  our 
own  judgments  and  relieve  our  own  consciences,  that  we  may  unite 
in  support  of  African  slavery  as  a  permanent  institution.  We  have 
no  alternative.  We  must  protect  our  rights  as  masters,  or  we  become 
worse  than  slaves.  We  must  go  into  our  own  mountains ;  we  must 
educate  our  own  daughters ;  we  must  qualify  them  to  become  gov- 
ernesses and  teachers,  that  they  may  educate  our  children,  and 
themselves  become  the  mothers  of  sons  worthy  to  inherit  and  quali- 
fied to  defend  our  property  and  our  institutions.  We  must  encour- 
age our  own  merchants;  we  must  employ  our  own  mechanics,  law- 
yers, doctors,  teachers,  professors,  and  ministers  of  the  Gospel ;  and, 
above  all,  we  must  employ  our  own  editors.*  We  must,  make  rail- 
roads, c6nnecting  our  seaports  with  the  great  West,  and  open  a 
direct  trade  with  Europe.  We  must  revise  our  monetary  system,  so 
as  to  employ  our  own  capital  in  maintaining'  our  own  credit,  instead 
of  handing  over  the  products  of  our  industry  to  the  agents  of  foreign 
bankers,  subject  to  the  fluctuations  of  the  foreign  market,  which 
those  bankers  can  regulate. at  pleasure.  We  must  print  our  own 
books,  and  especially  our  own  school  books.  We  must  create  a 
Southern  sentiment,  and  unite  our  own  people.  We  must  educate 
our  sons  to  command  our  armies,  and  prepare  to  maintain  our  rights, 
peaceably,  if  we  can,  forcibly,  if  we  must. 

That  the  South  may  act  in  concert  and  with  efficiency,  a  Southern 
Education  Society  has  been  organized  and  chartered  by  the  State  of 
Georgia.  The  charter  and  the  .constitution  of  the  Society  are  hereto 
annexed.  The  Legislature  have  also  incorporated  a  female  college 
and  a  university,  to  be  located  at  Dalton,  in  this  State.  They  have 
also  incorporated  a  city  company,  who,  as  the  proprietors  of  the 
city  property,  have  agreed  to  give  twenty  thousand  dollars  from  the 
proceeds  of  the  sale  of  lots,  if  a  like  sum  is  contribiited  by  other  per- 
sons. The  Society  will  send  agents  throughout  all  the  Southern 
'  States,  for  the  purpose  of  soliciting  contributions  to  its  funds,  and  as 
;  soon  as  a  sufficient  sum  is  obtained,  they  will  commence  the  publica- 
tion of  books,  and  put  their  schools  into  operation. 

They  have  issued  the  prospectus  of  the  Southern  Statesman,  and,  as 
,'  the  paper  will  be  the  property  of  the  Society,  and  the  profits  derived 
I  '  from  it  applied  in  aid  of  the  Female  College,  it  is  hoped  that  the  en- 
tire Southern  public,  and  especially  the  ministers  of  the  Gospel  and 
I  .the  ladies  of  the  South,  will  exert  themselves  to  obtain  subscriptions 
^-and  donations  to  place  the  publication  on  a  permanent  and  efficient 

.  basis.  The  prospectus  explains  its  purpose  and  objects. 
jr.  It  will  be  seen  that  the  managers  of  this  Society  must  be  Baptists, 
•'(jiand  that  the  University  and  College  will  be  under  their  control. 
I)..  We  are  prepared  for  objections.  It  has  been  said,  and  will  be  again 
iflj!  repeated,  that  such  institutions  should  not  be  under  sectarian  influ- 
ence.    We  place  these  institutions  under  Baptist  control,  because, 


'     • 


70 

while  we  invite  the  co-operation  and  solicit  the  aid  of  persons  be- 
longing to  all  other  religious  denominations,  and  also  of  those  who 
are  not  members  of  any  church,  we  rely  chiefly  upon  members  of 
the  Baptist  society  for  the  means  of  building  them  up  and  giving 
them  efficiency ;  hoping  that  our  success,  as  pioneers  in  a  field  which 
requires  so  many  laborers,  will  stimulate  other  churches  to  follow 
our  example.  It  will  further  be  seen  that  the  Society  wish  to  edu- 
cate Baptist  missionaries,  who  shall  go  from  our  schools  into  the 
non-slaveholding  States  for  the  purpose  of  establishing  Baptist 
churches  in  those  States  in  fellowship  and  communion  with  the 
Baptist  churches  in  the  Southern  States,  and  thus  bring  the  com- 
bined influence  of  religion  and  patriotism  in  aid  of  the  Federal 
Union,  aijd  that  this  proceeding  must  necessarily  be  of  a  denomina- 
tional character.  In  further  vindication,  we  add,  that  other  Chris- 
tian churches  have  established  sectarian  schools  and  colleges,  and  . 
that  it  will  be  fortunate  for  them  and  for  the  country  if  our  example 
should  induce  them  to  be  more  careful  in  the  selection  of  teachers. 

We  are  aware  that,  as  our  newspaper  will  treat  of  political  su 
jects,  it  will  be  ,said  that  our  purpose  is  to  blend  religion  and  pol 
tics.  The  greatest  of  temporal  blessings  is  a  good  government 
We  admit  that  Christ's  kingdom  is  not  of  this  world,  but  we,  as 
men,  have  our  relations  to  temporal  as  well  as  spiritual  matters; 
and  it  is  no  less  the  duty  of  Christian  men  to  resist  Satan's  influence 
in  affairs  of  .State  than  to  resist  it  in  the  government  of  the  Church. 
•  P.  S. — It  may  he  well  to  add  a  few  Words  in  further  illustration  of  the 
plans  and  purposes  of  the  Southern  Education  Society. 

No  one,  who  will  carefully  read  the  history  of  the  past,  can  doubt  that 
the  infidelity  which  preceded  the  French  Revolution  led  to  the,  massacres 
which  marked  that  period,  nor  can  any  one  who  carefully  examines  •  the 
Scriptures  fail  to  see  that  "the  false  philanthropy  and  the  false  religion 
which  have  arrayed  the  Abolitionists  of  the  North  against  the.  peace  and 
perpetuity  of  this  Union,  is  the  legitimate  offspring  of  that  false  philoso- 
phy which,  in  the  name  of  reason  and  humanity,  deluged  the  world  in 
blood. 

It  iS  the  purpose  of  the  Southern  Education  Society,  through  its  publi- 
cation, to  examine  into  the  history  of  the  past,  to  employ  able  writers  to 
prepare  a  series  of  school  books  and  other  publications  suited  to  the  times 
in  which  we  live,  and  free  from  the  morbid  and  sickly  sentiment  which  is 
the.  peculiar  characteristic  of  most  of  the  books  now  in  use. 

An  estimate  has  been  made,  showing  that  the  profits-  on  the  Northern 
books  and  publications  used  in  the  South,  would  feed,  clothe,  and  educate 
several  thousand  females.  The  Southern  planters  must  necessarily  occupy 
large  tracts  of  land,  and  are  compelled  to  send  their  children  from  home  or 
employ  private  teachers.  John  Q.  Adams  was  one  of  the  most  active 
Abolitionists.  It  was  under  his  advice  that  Daniel  P.  Cook  moved  the 
Missouri  restriction  in  Congress,  and  under  his  advice  Governor  Slade,  of 
Vermont,  organized  an  Education  Society,  who  are  sending  into  the  South 
and  West  hundreds  of  Abolition  Missioners,  in  the  shape  of  beautiful 


I  •      -    "    *  71 

• 

women,  who,  trained  for  the  purpose,  go  in  search  of  husbands,  and,  as 
teachers  and  governesses,  are  introduced  into  our  families,  train  up  our 
daughters,  and  marry  our  sons,  thus  building  up  in  our  midst  a  morbid 
feeling  on  the  subject  of  slavery,  which  saps  the  foundation  of  our  pros- 
perity.    It  was  thus  that  Adam  was  driven  from  Paradise. 

We  must  counteract  these  proceedings  by  educating  our  own  daughters 
to  be  teachers  and  governesses ;  and  this  we  can  do  if  the  people  of  the 
'  South  will  unite  in  aid  of  the  efforts  of  this  Society. 

THE   FOLLOWING  IS   THE   CONSTITUTION   OP   "  THE   SOUTHERN   EDUCATION 

SOCIETY." 

Whereas,  The  Baptist  churches  in  the  non-slaveholding  States,  heretofore 
in  fellowship  and  communion  with  the  Baptist  churches  in  the  slavehold- 
ing  States,  have  instituted  new  rules  of  faith  and  practice,  which  deny  to 
slaveholders  their  equal  rights  of  conscience  and  equal  religious  privileges,- 
and  which  rules  of  faith  and  practice  have  a  direct  tendency  to  create  sec- 
tional prejudices,  operating  upon  the  religious  and  political  opinions  of  the 
people  of  the  non-slaveholding  States,  in  such  manner  as  to  endanger  the  peace 
and  harmony  of  the  people  of  the  United  States,  and  by  inducing  strife  and 
animosities,  greatly  to  prejudice  the  cause  of  civil  and  religious  liberty,  which 
all  men  should  promote  by  all  proper  means;  therefore,  the  undersigned, 
having  this  end  in  view,  do  hereby  organize  themselves  into  a  Society,  to 
be  called  "  The  Southern  Education  Society,"  and  do  ordain  and  establish 
for  its  basis  and  government  the  following  Constitution : 

Article  1.  The  objects  of  this  Society  shall  be  to  promote  the  cause  of 
,,  Education  generally,  and  especially  in  all  the  slaveholding  States — to  qualify 
females  to  become  teachers  in  common  schools,  in  public  and  private  acade- 
mies, and  in  private  'families,  and  also  to  qualify  all  who  in  the  Southern 
States  are  to  exercise  an  influence  over  public  opinion,  and  especially  the 
rising  generation,  the  graduates  of  our  colleges,  and  all  men  who  are  here- 
after to  fill  public  stations,  whether  in  the  pulpit,  at  the  bar,  or  in  the 
Legislature  or  in  Congress,  to  assert,  vindicate,  and  maintain  all  the  rights 
which  belong  to  us  as  citizens  of  the  United  States,  and  especially, 

1st.  Our  rights  of  conscience  and  equal  religious  privileges ; 

2d.    Our  rights  as  citizens  and  equal  political  privileges  ; 

3d.  Our  right  to  hold  slaves  as  property ;  and  that  it  is  illegal  and  a 
gross. violation  of  propriety  and  of  good  ffaith,  for  the  people  of  any  non- 
uaveholding  State  of  this  Union,  and  especially  for  the  Legislature  of  any 
^uch  State  to  do  any  act  whatever,  which  may  in  any  wise  diminish  the 
value  of  our  slaves,  or  endanger,  or  disturb  our  peaceful  enjoyment  of  such 
property. 
'  Article  2.  The  means  by  which  this  Society  proposes  to  act,  are  :       * 

1st.  The  endowment  and  support  of  Female  Seminaries,  in  which  fe* 
males  may  be  qualified  to  become  teachers  in  public  arid  private  schools, 
and  in  private  families,  and  thus  economize  the  cost  of  education,  by  bring- 
ing into  requisition  the  character,  talents  and  influence  of  woman,  and  per- 
mitting her  to  do  her  part  in  aid  of  the  great  cause  of  civil  and  religious 


2d.  The  endowment  and  support  of  Common  Schools  and  Colleges,  in 


72 

which  the  teachers  and  professors  shall  be  persons  whose  opinions  on  these 
fundamental  questions  are  known  and  approved. 

3d.  To  create  a  literature  for  the  South,  by  the  publication  in  the  South, 
of  school  books,  bibles,  hymn  books,  periodicals  and  newspapers,  and,  as  far 
as  practicable,  all  other  books  and  publications  suited  to  or  required  by  the 
public ;  and,  with  this  view,  to  establish  Bible  Societies,  Sunday  School 
Societies,  Tract  Societies,  and  Auxiliary  Education  Societies,  auxiliary  to 
the  Southern  Education  Society. 

4th.  To  qualify  Ministers  of  the  Gospel,  who,  holding  the  Constitution 
of  the  United  States  in  one  hand  and  the  Holy  Bible  in  the  other,  shall  go 
forth  from  our  Colleges  as  missionaries  to  the  non-slaveholding  States,  re- 
buking the  sinful  proceedings  in  those  States,  and  especially  the  Phari- 
saical pretensions  to  greater  holiness ;  teaching  their  churches  Christian 
charity  and  brotherly  love,  and  planting  churches  in  those  States,  wherever 
two  or  more  can  be  found  who  will  stand  forth  as  witnesses  of  the  truth, 
and  willing  to  become  members  of  a  church  in  fellowship  and  union  with 
the  churches  of  the  South. 

- 


73 


APPENDIX    B 


The  following  are  extracts  from  the  article  referred  to  on,  page  60,  whicli 
I. published  in  London  :  • 

OF  ,THE    UNITED    STATES,    THEIE    FORM     OF    GOVERNMENT,   AND    THEIR     RELATION    TO    SLAVERY 

AND   THE    SLAVE    TRADE. 
•  ■  , 

In  explaining  their  relation  -which  the  United  States  bear  to  the  subject  of  slavery 
•we  must  look  to  the  organization,  the  powers,  and  purposes  of  the  Federal  Governmeiit- 

The  United  States  were  originally  colonies,  settled  under  the  authority  and  subject  to 
the  crown  «>f  Great  Britain.  One  of  the  grievances  of  which  they  complained  before  the 
Revolution,  was,  that  the  mother-country  compelled  them  to  receive  African  slaves,  im- 
ported by  authority  of  British  law. 

The  immediate  cause  of  the  Revolution  was,  the  attempt  of  the  British  parliament  to 
tax  the  colonies.  'I  his  led  them  to  sciutinize  the  principle  of  taxation.  They  saw  that 
no  representation  in  parliament  would  protect  them  against  oppression  ;  that  the  right 
of  taxatfon  was  in  fact  a  right  of  conversion,  and " that-  to  permit  parliament  to  levy 
taxes,  was  to  surrender  their  property  to  the  destruction  of  that  body.  This  principle 
Was  carried  into  the  struggle  of  the  Revolution.  The  colonies  dispersed  over  so  large 
an  extent  of  tenitory,  saw  clearly  that  their  Congress,  composed  as  it  was  of 
delegates  representing  different  sectional  interests,  would  sympathize  with  the  interests 
which  they  represented,  and  that  they,  too,  might  abuse  the  power  of -taxation.  Hence 
the  Congress  of  the  Revolution  had  no  power  to  levy  taxes.  They  wer*  but  an  advi- 
sory council.  Men  and  money  were  furnished  by  the  States.  Each  State  was  a  dis- 
tinct and  separate  independent  government.  Each  State  had  a  distinct  organization; 
its  governor,  its  legislature,  its  judiciary,  its  civil  aud  military  officers.  Upon  declaring 
themselves  independent  of  the  mother-country,  ench  State  organized  their  respective 
governments  for  themselves.  The  people  of  slave  holding  States  were  compelled  to 
take  into  consideration  the  state  of  their  society  as  it  then  existed. 

The  question  was  not  whether  they  would  institute  slavery;  it  had  already  been  insti- 
tuted by  the  British  Government.  The  black  man  was  already  the  property  of  the 
white,  by  the  law  of  England. 

Is  it  matter  of  surprise  that,  under  such  circumstances,  the  master  believed  that  his 
slave  was  not  qualified  by  habits,  education,  or  intelligence,  to  exercise  political  rights  ? — 
that  the  black  man  was  not  the  equal  with  the  white,  and  that  legislation  could  not 
make  him  so  ? — that  to  emancipate  the  slave,  without  giving  him  equal  political  rights, 
would  have  created  a  degraded  caste,  which,  so  far  from  contributing  to  ttteir  moral  or 
physical  improvement,  would  have  led  to  their  still  further  degradation  ?  and  that,  to 
have  given  them  equal  pilitical  rights,  constituting  them  a  part  of  the  Government  it- 
self, would  have  inoculated  the  Government  with  a  moral  disease,  which  must  have 
caused  its  premature  decay  ?  Is  it  surprising  that  they  should  have  believed  that  the 
public  safety  forbade  to  engraft  the  blacks  upon  the  body-politic,  and  that  they  had  no 
alterHative  but  to  recognize  and  continue  the  pre-existing  system  of  slavery  ?    Having 


74 

resolved  to  do  this,  they  passed  laws  to  ameliorate  the  condition  of  the  slave,  and  placed 
him  under  their  protection.  They  identified  the  interest  of  the  master  and  the  slave, 
and  compelled  the  master  to  provide  him  sufficient  food  and  raiment.  Instead  of  living 
&n  dry. potatoes,  as  is  the  case  with  the  Irish  laborer,  the  American  slave  has  an  abun- 
dance of  wholesome  diet,  and  to  spare  Instead  of  sleeping  upon  wet  straw,  with  a 
single  poverty  blanket  for  a  whole  family,  as  in  Ireland,  the  American  slave  has  good 
bedding  and  au  abundance  to  spare  of  bed-clothes.  Instead  of  one  suit  in  seven  years, 
as  in  Ireland,  he  has  his  three  new  suits — one  for  winter  and  two  for- summer*,  and  good 
shoes  and  stockings.  Instead  of  killing  them  by  unmitigated  toil  long  before  they  be- 
come burthensome,  through  age  or  infirmity,  as  charged  by  the  Edinburgh  Review ;  and 
.instead  of  permitting  ihem  to  perish  by  exposure  to  hunger  and  cold,  as  in  Ireland,  the 
American  slave  is  nursed  in  sickness,  and  comfortably  provided  for  in  his  old  age. 

We  have  said  that  the  colonies,  in  declaring  themselves  independent,  refused  to  or- 
ganize a  Central  Government  with  the  power  of  taxation ;  that  the  Congress  of  the 
Revolution  was  but  an  advisory  council,  and  that  the  States  were  separate  sovereign* 
ties.  As  such,  on  the  4th  of  July.  1 776,  they  declared  themselves  independent,  which 
independence,  as  separate  sovereign  States,  was  recognized  by  England  herself  in  the 
treaty  of  pea<je. 

These  separate  sovereign  States  thus  became  a  part  of  the  society  of  nations,  who 
recognised  their  right  to  establish  their  own  form  of  Government,  and,  in  doing  i  o,  recog- 
nised the  institution  of  slavery  as  by  them  established.  After  they  had  thus  been  ad- 
mitted into  the  family  of  nations — after  their  forms  of  Government,  including  the  insti- 
tution of  slavery,  had  been  recognized  and  adopted,  they  determined  to  form  a  mora 
perfect  union,  and  for  this  purpose  the  States  selected  delegates,  who  met  in  convention 
and  proposed  for  their  adoption  the  present  Federal  Constitution.  In  that  convention 
each  State  had  the  same  voice,  and  the  constitution  thus  prepared  had  no  binding  force 
until  it  was  adopted  by  nine  States,  and  then  only  as  between  the  States  so  adopting  it. 
It  will  thus  be  seen  that  the  Federal  Constitution  is  a  compact  between  sovereign  and 
independent  States.  . 

These  States  carried  into  the  convention  great  diversity  of  opinion.  Some  of  the  dele- 
gates were  in  favor  of  a  monarchy;  some  preferred  a  President  and  Senate  for  life; 
many  desired  to  create  a  strong  Central  Government ;  but  the  conflict  between  the  colo- 
nies andthe  mother  country  had  begotten  a  repugnance  to  monarchy  ;  and  an  apprehen- 
sion that  a  strong  Central  Government  would  end  in  the  despotism  of  an  absolute  ma- 
jority, in  which,  the  interest  of  the  weaker  sections  would  be  sacrificed  by  combinations 
of  the  stronger,  induced  the  weaker  States  to  insist  upon  reserving  an  equal  voice  mtbe 
Senate,  and  to  resist  every  attempt  to  give  the  Federal  Government  any  further  domes- 
tic control  than  was  indispensable  to  union  among  themselves,  aud  to  a  successful  ad- 
ministration of  their  foreign  relations.  The  Federal  Constitution,  therefore,  while  it 
constitutes  them  one  distinct  nation  as  to  all  the  rest  of  the  world,  is  but  a  compact  be- 
tween sovereign  States,  regulating  their  intercourse  with  each  other,  which  compact  was 
not  intended  to  interfere  with  the  Constitution  or  form  of  Government  pre  existing  in 
the  several  States,  who,  in  adopting  it,  considered  and  treated  each  other  as  separate 
Governments. 

Slavery  had  been  established  by  Great  B;itain,.and  continued  by  the  States  in  which 
it  had  been  thus  established,  because  the  people  of  those  States,  in  declaring  themselves 
independent  of  the  mother  country,  did  not  believe  that  they  could,  consistently  with 
their  own  safetv,  or  the  happiness  of  the  blacks  themselves,  change  the  relation  which 
the  British  Government  had  forced  upon  them ;  and  the  other  American  States,  in  form- 
ing the  Federal  Constitution,  had  no  more  right  to  insist  that  the  slaveholding  States 
should  abolish  slavery,  and  to  make  that  a  condition  of  their  becoming  parties  to  the 
Federal  Government,  than  France  or  England  had  to  require  it  as  a  condition  to  the 
treaty  of  peace,  by  which  their  independence  was  established.  In  fact,  the  question  of 
slavery  never  has  been  submitted  to  the  American  people  as  such.  The  question  before 
them  was  not  whether  slavery  should,  be  abolished,  but  whether  they  should  become 
parties  to  the  Federal  Constitution.  In  doing  io,  the  several  States  became  members  of 
the  Federal  Government,  reserving  to  themselves  the  exclusive  control  over  their  do- 
mestic institutions.     And  hence,  as  domestic  slavery  was  a  domestic  institution,  and 


.         75  • 

under  the  exclusive  jurisdiction  of  the  respective  States,  the  Federal  Government  being 
charged  with  the  foreign  relations  of  all  the  States,  is  alike  bound  to  protect  the  inter-  • 
pst  and  property  of  all ;  and  hence,  so  long  as  any  State  shall  recognize  the  property  of§ 
the  master  in  his  slave,  the  Federal  Government  is  as  much  bound  to  protect  that  right 
of  property  as  it  is  to  protect  the  right  of  property  of  the  merchant  in  Jus  ships.  This 
brings  us  to  the  case  of  the  Creole,  where  slaves,  the  property  of  an  American  citizen-, 
on  board  an  American  ship,  passing  from  one  American  port  to  another,  prompted  by 
assurances  that  if  they  could  reach  a  British  port,  they  would  be  liberated,  rose  upon 
the  crew,  murdered  part  of  them,  and  compelled  the  others  to  navigate  the  ship  to 
Nassau  (New  Providence),  where  they  were  set  at  liberty  by  the  British  authorities. 
The  case  cannot  be  strengthened  by  argument.  The  Federal  Government  was  consti- 
tuted to  protect  the  rights  of  property  of  the  slaveholder  in  all  questions  arising  be- 
tween him  and  Joreign  Goverrfments..  We  know  that  very  high  authority  have  de- 
clared that  there  is  no  law  in  England  which  will  authorize  the' delivery  of  these  slaves. 
"We  hold  that  slaves  by  the  law  of  nations,  are  admitted  to  be  property  ;  that  while  on 
board  an  American  snip,  they  are  slaves ;  and  that  a  vessel  carried  by  mutiny  into  a 
neutral  port  is  not  subject  to  the  municipal  regulations  of  that  port ;  and  that  the  seizure 
or  these  slaves  was  an  illegal  confiscation. 

Can  any  one  suppose  that  the  American  Government  would  permit  any  other  Gov- 
ernment to  confiscate  an  American  ship  carried  intb  a  neutral  port  under  such  circum- 
stances ?  And  if  they  would  not  permit  the  confiscation  of  the  ship,  how  can  they, 
without  dishonor,  permit  the  confiscation  of  the  slaves  \  >     ■ 

They  .are  as  much  bound  to  protect  the  property  of  the  Southern  planter  as  of  the 
Northern  merchant. 

Thus,  in  the  working  of  this  complex  system,  the  institution  of  slavery  counteracts  the 
influence  of  universal  suffrage,  and  prevents  the  ascendancy  of  that  absolute  majority  of 
the  evils  of  which  M.  De  Toqueville  was  apprehensive;  and,  therefore,  the  American 
statesman  places  a  much  higher  estimate  upon  it  than  the  mere  right  of  property  ;  and 
'  the  intelligent  European  will  see  that  it  constitutes  a  distinct  element  in  American  so- 
ciety, acting  upon  the  machinery  of  government,  which  is  not  applicable  to  the  States  of 
Europe. 

The  London  Times  tells  us  ttiat  "the  British  Government  has,  with  great  exertions, 
managed  to  conclude  treaties,  by  which  the  slave  trade  is  to  be  punished  as  piracy ;  that 
the  right  of  searching  American  ships  is  indispensable  to  its  execution,  and  that  the 
British  Government  is  determined  to  enforce  it."  Following  upon  the  heels  of  this,  even 
before  these  treaties  are  ratified,  we  have  an  order  in  council  authorizing  the  transpor- 
tation of  East  India  emigrants  to  the  island  of  Mauritius,  and  we  are  told  that  extensive 
arrangements  have  been  made  to 'transport  emigrants  from  Africa  to  Jamaica,  Trinidad 
and  Guiana.  The  20th  article  of  this  order  in  council,  which  bears  date  January  14th, 
1842,  is  in  the  following  words:  "No  emigrant,  arriving  from  India  at  Mauritius,  shall, 
in  Mauritius,  be  capable  of  entering  into  any  contract  for  service  except  for  the  period, 
in  the  manner,  and  under  th'e  superintendence,  which,  by  a  law  in  force  there,  is  re- 
quired in  case  of  contracts  for  service  by  other  laborers  in  agriculture  or  manufactures 
within  the  said  island." 

This  order  provides  for  the  emigration  of  free  labor,  and  requires  that  such  laborer 
shall  be  incapable  of  making  a  contract,  except  by  a  law  made  by  the  party  giving  him 
employment  Now  hear  what  the  Edinburgh  Review  says  in  relation  to  free  labor  in 
Jamaica,  and  the  means  used  by  the  law-makers  in  Jamaica,  to  reduce  the  price  of  free 
labor  below  that  of  slave  labor.  "  It  has  been  attempted,"  says  the  Review;  ''to  make 
the  dwelling  and  provision-ground  of  the  negroes  the  instrument  of  compelling  them  to 
work  for  the  landholder,  on  whose  plantation  they  reside,  or  reducing  their  wages  !" 
The  language  used  has  beerl,  if  you  do  not  work  for  me,  you  must  immediately  quit 
your  house  and  land  (to  the  latter  of  which  its  tenant  has  given  its  principle  value) ;  if 
you  demand  so  much  a  week  for  wages,  1  demand  so  much  a  week  for  rent,  or  rather  so 
much  fur  each  member  of  your  family,  without  reference  to  the  actual  value  of  the  ten- 
ement and  its  appurtenances,  and  the  one  demand  and  the  other  shall  be  simultaneously 
adjusted ;  the  strong  arm  of  the  law  has  been  liberally  invoked  to  carry  on  the  contest 
commenced  on  such  grounds;  in  some  instances  the  administrators  of  the  laws,  enact- 


76 

merits  of  the  most  heterogeneous  description  have  been  bi ought  to  bear  upon  the  unfor- 
tunate laborers ;  there  are  the  contract  act,  the  poundage  act,  the  fishery  act,  the  huxtcr 
act  and  pedlar  act,  the  police  act,  and  the  vagrant  acts. 

When  we  come  hereafter  t«  speak  of  the  suffering  poor  of  Ireland,  the  reader  will 
understand  the  pAcess  by  which  free  lab'-r  is  reduced  below  the  cost  of  slave  labor. 
But  here  again  we  recur  to  the  Edinburgh  Review.  It  says :  "  When  slavery  is  tem- 
pered with  ordinary  humanity,  what  Mr.  Gurney  calls  the  'dead  weight,' the  mainte- 
nance of  the  old,  the  infirm,  the  sick,  the  shammers  of  sickness,  the  mothers  of  young 
infants,, and  the  numerous  children,  make  the  aggregate  expense  ruinous." 

\Such  is  the  theory  of  British  philanthropy;  and,  therefore,  in  order  "to  beat  Cuba 
and  Brazil  out  of  the  market,"  they  substitute  free  labor  for  slave,  labor,  and  leave  the 
old,  the  infirm,  the  sick,  the  widow  and  orphan,  to  perish. of  hunger  and  nakedness!  But 
this  is  not  enough.  The  same  Review  tells  us  "<that  the  proposition  for  declaring  the 
slave  trade  piracy,  assumes  that  the  right  of  search  and  seizure  should  be  exercised,  and 
that  the  culprit  should  be  prosecuted  in  the  courts  of  this  (Great  Britain),  and  not  of  the 
culprit's,  country."  - 

But  hear  the  Reviewer.  He  says :  "The  poverty  of  India  must  be  cured  by  the  at- 
traction of  British  capital  to  the  fields  of  production.  United  as  it  happily  is  with 
England,  it  never  can  become  a  manufacturing  country,  *****  being  hap- 
pily disabled,  by  their  relative  position,  from  levying  contributions  upon  each  other,  by 
domestic  industry-protecting  tariffs,  the  people  of  India  may  emplor  themselves  profita- 
bly for  a  period,  to  which  it  is  impossible  to  fix  a  limit,  in  raising  raw  produce  to  ex- 
change for  the  manufactures  of  Great  Britain."  Both  the  capital  and  ihe  intelligence 
necessary  even  for  this  purpose  must  come  from  England." 

But  it  may  be  well  also  to  look  to  the  comparative  resources  of  the  two 
countries.  America  has  no  debt;  she  has  all  the  materials  of  war  within 
herselft  She  has  men,  provisions,  arms,  and  all  the  munitions  of  war;  and 
all  these  she  cau  command  at  home,'hj  means  of  her  power  of  taxation  and 
her  credit.  She  will  not  be  compelled  to  come  to  Europe  for  a  dollar.  She 
has  the  material  for  navies,  also,  and  these  she  can  produce  and  equip  with 
the  facility  of  magic.  She  has  six  hundred  steamboats  on  a  single  river, 
aud>  these  can  be  converted  into  a  fleet,. bearing  men  and  provisions,  that 
will  drive  the  piratical  fleets  of  England  and  the  West  Indies.  But  would 
she  be  content  with  this  ?  Would  she  not  declare  the  emancipation  of  the 
British  colohies  ?  Would  not  France,  and  Russia,  and  Holland,  unite  with 
America  in  breaking  the  chains  which  bind  down  the  independence  of  Ire- 
land and  of  India?  'Instead  of  compelling  all  the  world  to  come  to  pur- 
chase India  cotton,  and  India  sugar,  will  not  all  the  world  unite  with  Ame- 
rica in  declaring  the  servitude  of  Ireland  and  India  to  be  at  an  end?  And 
would  not  this  be  accomplished  ?  Is  this  the  just  retribution  which  an  all- 
wise  Providence  has  decreed  as  the  punishment  for  the  sins  of  England  ? 
and  is  the  struggle  of  the  British  land-owner,  to  maintain  his  position  in) 
society,  to  end  in  this?  What,  then,  is  to  become  of  British  power? 
Who,  then,  will  pay  British  rents  and  British  taxes  ? 

We  will  not  attempt  to  probe  the  subject  further.  If  Great  Britain} 
would  avoid  the  consequences,  she  must  retrace  her  steps;  if,  indeed,  thq 
day  of  retribution  has  arrived,  she  will  persevere.  * 


77 


APPENDIX    C 


The  traditionary  policy  of  Russia,  from  the  time  of  Catherine,  has  been  to 
seize  upon  Constantinople  as  the  gate  to  the  commerce  of  India;  and   hence 
England,  jealous  of  the  progress  of  Russia,  has  sustained  the  power  and  do- 
minion of  the  Turk  against  the  encroachment  of  Russia.     Preliminary  to   a 
renewal  of  the  war  with  the  Sultan,  Russia  created  a  large  fleet  at  Sebasfopol 
As  a  means  of  perpetuating  his  dynasty,  and  hoping  to  secure  the  co-opera, 
tion  of  England,  Napoleon  the  Third  became  a  party 'to  the  war  in  the  Crimea , 
and  not  only  destroyed  the  Russian  fleet,  and  not  only  prevented  a  control 
of  the  Black  sea,  but  closed  the  Dardanelles  to  Russia.     Shut  out  frx>m    the 
commerce  of  India  by  way'of  the  more  direct  route,  the  emissaries  of  Russia 
were  soon  found  in  the  north  of  China  and  the  Japanese  s.eas,  and  proposals  were 
issued  for  a  loan  to  be  applied  to  the  construction  of  a  railroad  from  St.  Peters- 
burg on  the  north  of  China,  to  the  mouth  of  the  Amoor  river.     Seeing  that 
such  a  railroad  would,  unless  otherwise  prevented,  give  to  Russia  a  prepon- 
derating  influence    in    China,     and    endanger    the    British    supremacy    in 
India,    England    induced    France     to     unite    with    her   in*  the    war'  upon 
China,  by  which  the  monopoly  of  the  trade  Of  China  by   Russia  was  pre-, 
vented.     With  this  introduction,  I  give  in  the  appendix  an   article  from  the 
London  Spectator,  of  April  11,  1S57,  which,  as  was  intended,  defeated  tire 
Russian  loan,  and  has  delayed,  for  how  long  remains  to  be  seen,  the  construc- 
tion of  the  contemplated  railway. 

The  power  thus  described  by  the  Spectator  acts  in  concert,  and  lives  and 
moves,  and  had  its  being,  in  the  delusion  that  nothing  but  gold  or  silver  is' 
money.  Its  profits  depend  upon  its  control  over  the  exchanges,  which  are 
regulated  by  the  movement  of  money  and  of  commodities. 

THE  NEW  POWER  IN  EUROPE. 
[From  the  London  Spectator,  April  11,  1857.] 
The  present  state  of  affairs  on  the  Continent  suggests  the  existence  of  some  influence 
which  is  not  generally  recognized,  though  its  power  mtist  be  overruling  and  its  opera- 
tion universal.  'It  is  not  seen,  yet  it  reverses  the  councils  of  governments  which  appear 
to  be  supreme  ;  it  disregards  equally  public  opinion  and  the  interests  of  the  Statte  in 
which  it  has  its  agents.  The  monetary  condition  of  France  and  of  Northern  Europe 
draws  attention  once  more  to  the  irregular  and  dangerous  speculation  whioh  the  most 
powerful  man  in  Europe  tries  in  vain  to  curb;  it  would  seem  that  there  is  some  greater 
power  than  he,  irresponsible  and  absolute ;  and  when  we  turn  to  ascertain  the  fact,  we 
are  not  long  in  discovering  at  least  enough  to  create  uneasiness  and  to  demand  scrutiny. 
We  perceive  some  corroborative  proof  that  such  an  influence  does  exist— -that  its  power 
is  b,ecoming  supreme — that  it  is  now  doing  mischief,  and  that  it  may  become  dangerous 
alffie:  to  the  material  condition,  the  political  independence,  and  the  domestic  order  of 


States.  Nor  are  we  speaking  of  any  imaginary  or  mere  "  moral "  influence  ;  we  speak 
of  a  powerful  combination  more  than  political,  more  personal  than  a  Congress  of  diplo- 
matists or  prince -i. 

The  Emperor  Napoleon  has  long  been  engaged  in  the  endeavor  to  draw  out  the  enter- 
prise of  hi*  subjects,  and  the  effect  throughout  France  is  great.     Any  traveller  in  the 

,  most  outlying  provinces  perceives  a  remarkable  change  in  the  aspect,  action,  and  condi- 
tion of  the  people.  The  trading  class,  as  well  as  the  industrial  classes,  are  animated  by 
a  spirit  of  energy  hitherto  unknown  to  the  Celtic  population.  jThey  have  learned  not 
only  to  employ  their  time  with  more  vigor,  but  employ  their  savings — to  venture  that 
which  they  once  hoarded.  In  that  economical  sense  France  was  almost  a  virgin  soil,  and 
the  effect  is  described  by  the  traveller  as  marvellous.  Thus  far  a  blessed  change.  But 
look  beyond.  The  very  capitalists  who  fostered  if  they  did  not  implant  the  idea  in  the 
Imperial  mind,  have  seized  the  same  opportunity  to  project  movements  for  the  further 
development  of  capital,  its  power  and  productivity.  The  great  speculator  in  this  sense 
differs  in  some  degree  from  the  ordinary  trader.  The  money  merchant  obtains  his  profit 
entirely  from  the  simple  act  of  exchange,  and  he  does,  so  equally  whether  the  original 
holders  are  profiting  in  the  transaction  or  not.  He  may  be  the  broker  between  two 
communities  who  are  ruining  each  other,  and  build  his  fortunes  upon  their  downfall. 
And  the  individual  trader  in  this  merchandise  will  be  instigated  principally  by  the  de- 
sire to  grasp  large  and  prompt  profits.  He  is  not  a  safe  councilor  for  those  who  have  in 
charge  the  permanent  interests  of  States.  For  the  welfare  of  %,  community,  immensely 
accumulated  wealth,  hoards  of  gold,  are  not  so  essentiaFjis' well  diffused  supplies  of  the 
necessaries  of  life  and  its  enjoyments.  But  the  same  movement  which  gave  an  impulse 
to  the  commercial  spirit  in  France  made  the  largest  opening  that  the  world  has  ever 
seen  for  a  forward  movement  or'  great  capitalists  ;  and  they  have  snatched  it.  Alarmed 
at  the  vast  proportions  which  these  joint-stock  combinations  have  attained  in  France,  the 
Emperor  and  his  political  ministers  have  issued  their  protest  against  excesses  in  that 

*  direction :  they  have  followed  up  protests  with  restrictive'imposts  ;  but  still  the  move  - 
ment  goes  on 

The  commercial  activity  directed  to  the  development  of  real  trade  would,  with  as 
much  steadiness  as  rapidity,  inc/ease  the  available  means  of  the  French  people — would 
make,  them  more  independent  of  the  casualties  of  the  seasons— would  make  them  more 
comfortable,  more  orderly,  more  capable  of  supporting  their  ruler,  more  obedient  to  his 

i  decrees.     It  is  easily  to  be  understood  why  the  Emperor  Napoleon  desires  to  add  that 

'  element  of  English  order  to  the  military  capabilities  and  energy  of  the  French.  He  has 
in  great  part  succeeded.  But  the  excess  of  speculation  invoked  by  those  who  have  stood 
ready  to  take  advantage  of  the  impulse  has,  again  in  the  present  moment  as  it  did  in 
the  autumn  of  last  year,  threatened  to  defeat  the  improvement  by  ovei--doing  it ;  and 
we  in  England  are  under  the  same  commercial  pressure  which  visited  us  in  the  autumn. 
At  the  same  time  there  appears  to  be  no  suspense  in  developing,  extending  and  multi- 
plying the  immense  joint  stock  combinations  which  the  French  Emperor  has  endeavored 
t  >  restrain,  though  at  such  a  time  such  operations  ought  to  be  entirely  suspended.  We 
see  on  the  stocks  the  new  International  Society  of  Commercial  Credit,  whose  founders 
are  connected  with  the  great  money  corporations  in  every  capital  of  Europe — the  banks 
of  France,  England,  Amsterdam,  etc.  The  list  of  the  Council  of  Administration  of  the 
grand  company  lies  before  us.  Of  the  great  Russian  Railway  Company,  half  of  the 
members  short  of  one  are  Russians,  and  the  great  number  in  that  half  are  Councillors* 
of  State  and  officers  in  the  service  of  the  Erri^eror  Alexander.  In  that  Russian  half, 
however,  we  see  the  name  of  "  Thomas  Baring,  banker,  in  London."  The  other  half  con- 
sists of  men  whose  names  are  well  known  in  every  capital :  S.  Gwyer,  member  of  the 
Council  of  Commerce;  Earnest  Sillem,  a  partner  in  the  house  of  Hopetfc  Co.,«at  Ams- 
terdam ;  Cuillaume  Borski,  banker  in  Amsterdam  ;  Frantis  Baring,  banker  in  London  ; 
Henri  Hottinguer,  banker  in  Paris ;  Isaac  Pereire,  administrator  of  the  Paris  and  Lyons 
Railway ;  Baron  Seillere,  banker  in  Paris ;  M.  Auguste  Thurneyssen,  administrator  of 
the  West  of  France  Railway  ;  and  Me  Louis  Fould,  brother  of  the  well-known  State 
financier.  Some  of  those  are  the  names  we  so  constantly  encounter  in  that  compara- 
tively small  list  of  men  who  are  administering  the  greatest  financial  operations  in  Paris, 
Vienna,  St.  Petersburg,  Amsterdam  and  London.  The  object  of  this  company  is  to  take 
forty-five  millions  of  capital,  a  sutn  which  could  easily  be  raised  for  reproductive  pur- 
poses, but  which  they  intend  to  sink  in  railways  through  the  Russian  deserts  ;  while  the 


79 

actual  state  of  the  whole  world—of  Europe,  England,  America,  and  the  far  East— 
proves  that  we  cannot  spare  that  forty-five  millions,  nor  even  the  first  instalment  of  it 
Yet  these  few  gentlemen,  Who  rule  the  world  at  present,  have  determined  that  it  shall/ 
be  taken,  despite  the  Emperor  of  the  French,  the  Bank  of  England,  or  the  commei^ial 
public  of  this  country. 

It  is  said  that  the  position  of  M.  de  Morny  is  not  satisfactory  either  to  the  Emperor  of 
all  the  Russias  or  to  the  Emperor  of  the  French  ;  but  M.  de  Morny  is  fulfilling  a  career 
which. has  become  independent  of  Emperors.  He  has  attached  himself  to  the  Grand 
Council  of  the  International  Finance,  and  it '  is  that  Grand  Council  at  present  which 
arranges  the  affairs  of  the  world  by  the  power  of  the  purse,  let  potentates  and  parlia- 
ments think  what  they  may.  The  Emperor  of  the  French  is  at  present  engaged  in  at- 
tempting .to  restrain  the  use  of  fictitious  titles — counties,  vis-counties  and  baronies — ■ 
baubles  at  which  the  aristocracy  of  wealth  may  laugh  The  power  of  that  order,  which 
is  the  more  powerful  because  its  members  are  comparatively  limited,  proceeds  in  its  ac- 
tions independently  of  those  ordinary  political  movements,  and  shows  itself  pursuing 
its  course  uninterrupted,  undiverted,  whatever  may  be  the  state  of  the  commercial 
world,  whatever  may  be  the  mood  of  the  Imperial  mind,  Whatev*  r  may  be  the  action  of 
ordinary  statesmen. 

W$  are  not  considering  the  diversion  of  capital,  the  dangers  that  may  .arise  from  over 
speculations,  the  ruin  that  may  visit  shareholders  in  these  huge  joint  stock  companies, 
from  which  the  directors  always  withdraw  before  the  crash.  We  are  not  considering. 
the  commercial  disturbance  created  by  the  necessity,  which  is  forced  upon  Europe  just 
at  present,  of  .undergoing  a  high  rate  of  interest  for  ordinary  comuiercialtaccommoda- 
tion,  while  millions  are  lavished  upon  the  fancies  or  the  schemes  of  those  millionaire 
statesmen.  We  are  simply  considering  the  magnitude  and  the  independence  of  that 
power  of  combined  millions.  It  is  a  new  order— ra  new  administration  in  the  world. 
The  names  most  conspicuous  in  it  are  remarkable  for  certain  characteristics.  •  Read  them 
agaia — Rothschild,  Baring,  Steiglitz,  Pereire,  Hottinguer  and  Fould;  with  a  second 
order,  comprising  the  Weguelihs,  the >  Hopes,  and  the  Seillieres.  They  form  a  grand 
council  of  small  numbers  that  could  all  be  assembled  in  a  dining  room.  They  are  re- 
markable for  being  closely  connected  with  the  Governments  of  all  the  principal  States 
in  the  world,  while,  at  the  same  time,  they  are  not  closely  connected  with  tne  States 
under  those  Governments'  You  would  pot  accept  a  Baring  as  being  peculiarly  repre- 
sentative of  England;  you  mUst  choose  many  other  names  before  it— the  Russels,  the 
Stanleys,  the  Salts,  the  C^awshays,  Cobdens  and  Tyrells.  •  France  would  certainly  not 
be  represented  by  Pereire,  no  country  by  a 'Rothschild  ;  a  Steiglitz  is  by  no  means  ex- 
clusively Russian,  any  more  than  Fould  is  French.  The  class  is  alien  to  any  particular 
country,  and  yet  is  deeply  rooted  in  the  administration  of  each  country.'  It  can  com- 
mand not  only  a  mass  of  capital  enough  to  determine  the  financial  operations  of  a  Gov- 
ernment, the  success  or  failure  of  a  State  loan,  but  it  ean  influence,  beneficially  or  fa- 
'  tally,  the  course  of  trade,  by  turning  upon  any  one  branch  "the  combined  mass  of  capi- 
tals from  States  elsewhere,  just  as  the  five  potentates  of  Europe  can  muster  an  army 
which  would  crush  the  people  of  any  one  empire  mutinying  against  any  one  of  the  five. 
But  this  grand  council  of  millionaires  has  proved  that  it  is  superior  to  the  political  ad- 
ministration of  the  separate  countries.  It  is  at  once  alien  to  the  aristocracy  of  any 
country,  and  yet  becoming  more  powerful,  and  therefore  more  respected,  than  any  on« 
aristocracy.  Unlike  any  order  which  we  have  yet  seen,  it  has  its'home  equally  in  t-'aris, 
Berlin,  Vienna,  Amstersdam,  St.  Petersburg  or  London.  It  is  republican,  but  of  the 
aristocratic  republic,  more  close  than  the  Grand  Council  of  Venice,  infinitely  more  arbi- 
trary. Like  that  commercial  republic,  kings  bow  down  to  it ;  bat  the  kings  that  now 
bend  are  the  giant  emperors  of  our  day,  not  the  brawling  leaders  of  the  middle  ages. 
The  debates  of  this  council  are  not  reported ;  its  constitution  is  as  yet  unascertained 
and  undetermined.  We  feel  its  power  before  we  can  define  it.  It  is  independent  of 
political  councils,  higher  than  political  responsibilities,  ignorant  or*  constitutional  checks. 
It  stands  confessed  in  the  actual  events  of  the  present  week;  and  in  its  independence, 
perhaps  disregard  of  the  interests  which  it  overrides,  it  extorts  from  us  the  question 
whether  any  account  has  yet  been  taken  Of  the  immense  institution  that  has  sprung  up 
while  Emperors  and  common  politicians  were  thinking  to  settle  the  world  with '  armies 
and  treaties. 


The  aggregation  of  capital  and  credit  and  financial  influence,  thus  de- 
scribed,.was  the  fruit  of  the  system  of  funding  and  finance  adopted  by  the 
British  Government  acting  through  the  Bank  of  England,  and  represents 
the  profits  created  by  dopling  the  public  credit  of  European  and  other  Gov- 
ernments, and  which,  having  concentrated  into  so  small  a  circle  so  great  a 
control  over  public  credit,  frdm  time  to  time  so  acts  upon  the  commerce  and 
exchanges  of  the  commercial  world  as  to  regulate  the  value  of  money  and 
of  property,  regardless  of  pecuniary  losses  which  they  inflict  on  those  who 
may  be  the  victims  of  their  remorseless  speculations.  Thus,  as  I  have 
stated  : 

AMERICAN  CREDIT  IN  'ENGLAND. 
Prior  to  1838,  any  American  merchant,  ■who  could  obtain  an  acceptance  of  either 
Wilde,  Wiggins  or  Wilsons,  three  American  houses  established  in  London  in  connection 
with  the  American  trade,  could  purchase  British  goods  upon  a  credit  of  six  and  twelve 
months,  and  as  our  commercial  system  was  then  organized,  he  could,  by  giving  his  Cus- 
tom House  bond,  get  time  to  pay  the  duties.  He  was  thus  enabled,  by  the  use  of  his 
credit,  to  command  British  capital  in  the  shape  of  merchandise,  and  having  made  sales, 
he  could  with  thte  proceeds  purchase  American  produce,  which,  being  remitted  to  the 
credit  of  the  London  House,  was  sold,  providing  funds  to  meet  his  payments. 

THE    FINANCIAL    SYSTEM    OF    ENGLAND     HOSTILE    TO    TIIE   CONFEDERATE 
#         •  STATES. 

Corresponding  to  the  emancipation  of  the  West  India  slaves,  and  the  opening  of  the 
East  India  Xrade,  the  capitalists  and  financiers  of  England  opened  a  bitter  and  relentless 
warfare  on  American  credit,  which  resulted  in  the  prostration  of  American  credit  in 
England,  and  a  new  organization  of  the  American  trade;  under  which,  instead  of  their 
giving  us  their  capital  upon  our  credit,  we  gave  them  our  capital  upon  their  credit.  The 
■modus  operandi  was  thus:  An  agent  of  a  British'banker  or  manufacturer  bought  cotton 
or  other  exports  in  a  Southern  port,  and  made  payment  in  a  billjjayable  sixty  or  ninety 
•  days  after  date,  in  New  York,  which  bill  was  discounted  by  our  banks,  because  nor 
merchants,  no  longer  able  to  buy  goods  in  Manchester,  bought  them  in  New  York,  and 
therefore,  funds  in  New  York  were  worth  more  than  funds  in  the  Southern  banks.  The 
bill  upon  New  York,  when  due,  was  paid  by  a  second  bill  upon  London,  which  was  dis- 
counted by  the  banks  of  New  York,  because  the  New  York  merchants  dealt  in  Europe, 
and  money  in  London  was  worth  more  than  money  in  New  York.  When  this  second 
bill  became  due,  the  cotton  had  reached  Liverpool  and  had  been  sold  to  the  manufac- 
turer, whose  note  at  ninetjr  days  had  been  discounted,  and  the  proceeds  placed  to  the 
credit,  not  of  the  Southern  planter  or  of  the  Southern  merchant,  but  of  the  British 
agent,  who  was  thus  enabled  to  fix  the  price  in  oui  market,  and  of  course  took  into  con- 
sideration all  the  cost,  and  charges,  and  the  contingencies  affecting  the  price  in  Liver- 
pool, and  especidly  the  fact  that  he  would  be  compelled  to  sell  the  cotton  in  Liverpool 
in  time  to  meet  the  payment  on  the  second  bill.  Consequently  the  price  thus  fixed  was 
the  lowest  at  which  the  combination  of  English  cotton  spinners  (the  cotton  supply  asso- 
ciation acting  in  concert  with  their  agents),  could  purchase  in  our  market.  The  mer- 
chants antl  the  banks,  of  New  York  were  also  deeply  interested  in  this  new  system,  be- 
cause it  made  New  York  the  port  of  entry  for  the  South,  and  gave  to  New  York  mer- 
chants and  New  York  banks  the  profits  which  have  built  their  marble  palaces,  and 
multiplied  their  wealth  and  resources. 

The  effect  of  this  re-organization  of  the  American  trade  was  to  reduce 
the  price  of  cotton  from  seqenteeM  cents  to  three,  and  the  effect  of  reinstating 
the  control  of  this  "new  power"  in  Europe  over  the  values  of  the  money, 
the  property,  ana  the  credit  of  this  county,  by  resuming  specie  payments, 
will  be  to  reduce  us  to  a  condition  equally,  or  even  more,  oppressive  than 
the  Egyptian  bondage  of  the  Israelites. 

DUFF  GREEN. 


RARE  BOOK 
COLLECTION 


THE  LIBRARY  OF  THE 

UNIVERSITY  OF 

NORTH  CAROLINA 

AT 

CHAPEL  HILL 


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